IT vendors offer cut-rate deals to counter decline in demand

Bangalore: Software applications may be available at low price as many of information technology vendors offer their software and other IT infrastructure products with a discount of up to 40 percent as the Indian companies tighten their IT budgets on the ground of financial crunch, reported The Economic Times.

"Vendors are offering up to 40 percent discount on software applications, and up to 25 percent for IT infrastructure products," said, Suvanjay Kumar Sharma, Vice President of corporate strategy at Yes Bank. "This is a good opportunity to buy IT products and solutions at a discounted price," he added.

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Research firm Frost and Sullivan estimates that Indian companies have spent around 26, 544 crore ($5.6 billion) during year ended March 2008 on buying IT services. Companies selling software for running and integrating business processes, including SAP and Oracle, are also offering discounts to their customers, according to Forrester Research.

"Discounts depend on the size of a deal, but for deals above $1 million in value, we are seeing bigger discounts than before," Ray Wang, Vice President, Forrester Research, said. "We can see discounts that start from 50-70 percent, especially in this last quarter," he mentioned.

Meanwhile, Arun Gupta, Group Chief technology Officer, Shoppers Stop said that the vendor discount has happened even in the past, when the economy was doing better. "We negotiated our deals with Oracle and SAP a few months ago, when the market was good, and managed to get a good bargain. These days everybody is in a cost-cutting mode, and not much of buying is happening, so discounts are irrelevant," he noted.

Many vendors have also started offering longer credit periods to make the adoption of solutions easy for the enterprises.

"Vendors are offering higher discounts on product licenses, keeping their maintenance prices more or less unchanged. Product leasing and volume discounts are the order of the day," said TR Madan Mohan of consulting firm Browne and Mohan.


Sunil Raina, Director (marketing), Avaya GlobalConnect opined that the global credit crisis has impacted the buying pattern of many firms in the Indian market. "We are offering our customers cost-effective affordable solutions to help them cope with tightened IT budgets," he pointed out.

Moreover, through the leasing arm Cisco capital, networking and communication vendor Cisco has arranged various credit facilities for customers. "Under the financing program, customers can defer payments for up to 120 days, without interest, during their Cisco Unified Communications solution deployment," said Naresh Wadhwa, President and country Manager, India and SAARC, Cisco.