Technology Reseller Austin Ribbon & Computer Increases Growth Potential With $22 Million Revolving Credit Line From IBM

Customers’ Demand for Larger Mix of IT Hardware, Software and Services Changing the Way Regional System Integrators Finance Solutions



AUSTIN, TX and ARMONK, NY .-Texas-based technology reseller Austin Ribbon & Computer (ARC) and IBM Global Financing (IGF), the financing business segment of IBM (NYSE: IBM), today announced a new funding agreement that will provide the regional reseller with a $22 million revolving credit facility to help it increase its market presence. The move would mean that ARC can now further increase its offerings for technology customers, who are currently demanding a greater mix of technology hardware, software and services solutions.

“Our universe continues to expand,” said Jana Grimes, founder and owner of the Texas-based reseller, which has seen its market penetration improve dramatically over the past few years. “Our customer engagements are being extended from shorter technology implementation projects to longer, more complex projects that roll technology out over time. Our customers now require additional, specialized services like site education and training, data transfer, security and destruction, as well as hardware disposal.”

Resellers like ARC are finding that financing offerings must change to match new demands from their customers for end-to-end solutions. With customer engagements on average growing from 30 days to six months nationwide, regional resellers like ARC are finding that simple and straightforward computer hardware installations are evolving to fill a greater need for more value-added services that require longer engagements and extended financing payment schedules.

“With more value-added services coming into play, resellers now have to hold onto the note a lot longer before getting paid for the solutions they offer,” said Mario Bernardis, vice president of IGF Commercial Financing. “Through the creation of flexible funding lines, IBM can help resellers expand their market presence to offer these new services and still maintain a strong balance sheet.”

The move to more comprehensive solution packages that involve a greater blend of technology with flexible financing offerings is one way to face the current short-term credit issues affecting resellers and customers alike. According to IDC Analyst Leslie Rosenberg, as the current credit crunch continues, channel companies should emphasize a “growing importance in enabling larger, more profitable solutions sales that include a potent mix of equipment, software and services.”

“[Financing] enable(s) partners to provide their customers with attractive financing alternatives while creating a recurring revenue stream for their organizations,” states Rosenberg in her report. [Shaky Credit Markets Threaten to Limit Channel Capital. Will This Rattle Foundations or Make Partners More Innovative? Sep 2007 - IDC Link]

ARC provides end-to-end information technology solutions to local and state government agencies, higher education entities, healthcare facilities and private industry. Their clients include the Texas Lottery Commission, Texas Department of Public Safety, University of Texas Southwestern Medical Center and Texas Department of Family and Protective Services. In addition to IBM, ARC provides technology from other vendors including Dell, Hewlett-Packard, Lenovo, Lexmark, Network General and Panasonic.

“The partnership with IGF allows us more opportunity for projects with longer implementation life-cycles, or extended and specialized service requirements,” added Grimes.