01732 759725 16 BUSINESS BRIEFING Rob Inchley, Business Development Manager, Siemens Financial Services UK discusses how flexible finance helps close more business I don’t know about you, but I find real stories about real people more convincing than any amount of theorising. I always want to hear how industry players have dealt with real-life situations. And even if you don’t know their exact identity, you can usually tell if a story is drawn from life. So, I’d like to tell you about an international software company who has partnered with Siemens Financial Services (SFS), why they did so, what we created with them and what made it work for both parties. Better together Cost certainty As I write this, Inflation is on everybody’s mind. In the UK it has topped 9%. In the US it’s over 8%. And if you’re selling into the Euro area, it’s also tipped over the 8% mark recently. Central banks are also putting base rates up – and that quarterly increase looks like it’s going to continue in many markets. The result is that software companies have been introducing regular price rises for customers. This issue was the starting point for our relationship with a leading cyber security software company. They knew that – as a specialist funder who really understood the market – we had a strong appetite for software company partnerships. And their first interest was helping introduce greater pricing certainty – on the one hand to keep their sales competitive – on the other to cement customer satisfaction. Our smart financing allows the software company to be paid out on deals straight away, but at the same time lets their customer pay in instalments over time. Once the deal is done, then the payment rate is fixed and cannot be hiked up during the financing period. That’s cost certainty in an uncertain, inflationary world. Meeting customer demand Their customers were requesting fixed terms with payments spread across three years. The product was sold on a ‘perpetual license’ basis – where the upfront payment covers usage for an indefinite period (outside of payments for maintenance, patches, upgrade or new version). The software company knew it had to offer something to satisfy the rising tide of customer demand, especially with the market moving more and more towards subscription products and away from perpetual licenses. Yet they did not want to take on the balance sheet burden or the risk of financing the deals themselves. That was fair enough – their expertise was software development, not business finance. To provide the solution, we were the ones who were able to supply the financing expertise, and we created a structure for them exactly tailored to their needs. Effectively, we bought the customer committed payment stream from the software company, this charged the customer a series of staged payments over a three year period. Our contracts people worked closely together to embed the financing conditions reliably in the contractual terms. That was a real collaboration to make sure those terms satisfied; software company, customer and SFS. And the fact that we were the funder was made completely transparent to each customer, because the software company saw a brand and competitive advantage in telling customers their proposition has ‘finance from Siemens.” Our smart financing allows the software company to be paid out on deals straight away That was a real collaboration to make sure those terms satisfied software company, customer and SFS Rob Inchley
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