Outlook Series | IBM Ponies Up $5B for Smart Infrastructure Initiatives

IBM Ponies Up $5B for Smart Infrastructure Initiatives

27 May 2009

IBM is making up to $3 billion available to finance IT initiatives in key economic stimulus projects in Europe and Asia-Pacific through IBM Global Financing, IBM’s lending and leasing business segment. Today’s announcement follows the availability of up to $2 billion announced by IBM on April 30 to help jump start US economic stimulus programs.

Specifically, IBM will make available up to $2 billion in financing in Europe and up to approximately $1 billion in the Asia-Pacific region. IBM Global Financing also will extend its North American coverage to include financing for smart technology projects in Canada.

The financing will help organizations move ahead with IT projects in 2009, while awaiting government funding, to build the technological and environmental infrastructure of the 21st century.

“There is a great connectivity among nations,” said John Callies, General Manager of IBM Global Financing. “While the various stimulus packages in different countries were designed to keep their own economies on track, it is as joined economies that we can rise from this global downturn together. In this context, IBM Global Financing is extending its stimulus financing program to countries in Europe and Asia-Pacific to help global recovery.”

IBM has already been helping enterprises and local governments in these areas build their infrastructures to spur growth in key IT projects such as Smart Grid, Health Information Technology, and Smart Transportation. The financing will be targeted to companies and organizations in countries with government funding committed to help economic stimulus, create new industries and enable infrastructure improvements.

The bulk of the $5 billion will be for financing (where available based on local financing practices) for smart technology projects for credit-qualified clients. The financing could be in the form of:

Low rates and flexible financing options.
Deferred payment plans.
Enterprise Financing facilities that offer structured lines of credit.
Specialized project financing packages that allow clients to align payment streams to anticipated benefits throughout the project.

"The recession is going to drive many organizations, public and private, to make transformational changes in their IT environment. However, without access to the correct financing offerings, a significant set of opportunities will be lost and society-wide projects, like SmartGrid, will be substantially delayed.” David Mitchell, Senior Vice President, UK-based IT Research, Ovum. “This is a bold move by IBM to help accelerate stimulus benefits into the current time frame.”

"The launch of the IBM Global Financing stimulus program in Australia comes at the right time,” says Jean-Marc Annonier, IDC Australia Program Manager for IT Spending. While many businesses could potentially benefit from these new Federal Budget policy measures, some are still having difficulties obtaining financing in a tight credit market. IBM Global Financing's stimulus financing offer will be certainly welcomed by organizations willing to modernize their IT infrastructure in order to prepare for the increased activity generated by heavy public investment programs."

IBM Global Financing stimulus financing will mainly target enterprises and municipalities looking to implement technology projects consisting of a majority portion of IBM hardware, software and technology services components. Financing also can be applied to non-IBM technology as part of a larger IBM solution.

Governments around the world from Australia to China to Germany have developed or are developing economic stabilization measures to spur employment opportunities and stimulate their economies. Many have developed programs to direct action towards “smart” investment to create jobs and to enable efficiency, sustainability and innovation.

IBM has been actively involved in smart investment areas in Europe and Asia-Pacific. For example:

In Denmark, IBM is teaming with DONG Energy to implement an Intelligent Utility Network, installing remote monitoring and control devices that give the company an unprecedented amount of information about the current state of the grid. The new solution also involves extensive analysis of the data provided by the remote devices, as well as reengineering of DONG Energy's business processes.
With traffic congestion on the rise in cities around the world, more governments are investing in building smarter rail systems. IBM is working with leading rail networks to improve the speed, safety and efficiency of both passenger and freight trains. IBM recently announced new rail projects in China, Taiwan and The Netherlands. These projects can make the global economy stronger, reduce greenhouse gas emissions and reduce road congestion.
In April, IBM China Research launched a new industry solution lab in China focusing on the development of Healthcare IT solutions and released four software packages that could help hospitals establish electronic patient records at reduced costs. The Government of China announced a plan to invest 850 billion (CNY) over the next three years to provide every village with a medical clinic and at least one hospital for every county by 2011. The plan includes funding for electronic patient records systems that can be shared by different hospitals around the country.