Research by cloud-based subscription management platform Zuora
confirms that the subscription economy has grown nearly 6x (more than 435%) over the last nine years
. Additionally, businesses in its Subscription Economy Index (SEI) report have consistently grown five to eight times faster than traditional businesses.
If you’re still providing most of your IT solutions on a break-fix basis, you may have trouble keeping up with your as-a-service counterparts. Selling software and services via a subscription is one thing, but how do you enable your customers to purchase IT hardware as a service (HaaS)? Some VARs and MSPs try to self-fund their HaaS offerings, but as Paul Dippell, CEO of Service Leadership
, points out, the more successful you are at selling HaaS, the more debt your organization has. For example, if you’re using a bank line of credit, you have $50,000 left on that line and you have two clients with $35,000 projects, you’ll use your cash reserves to help fund them. But then, if one of your clients defaults or goes out of business and you’re relying on their monthly payments to fund future projects, your available cash flow is diminished.
How to have your recurring revenue cake and enjoy it, too
Fortunately for Ingram Micro partners, there’s a way to build a recurring revenue business that doesn’t require self-funding, nor does it require a degree in financing or accounting to implement.
Heather Kopp, financial solutions executive, and Aaron Lehman, business development executive, Ingram Micro, recently made a guest appearance on a vlog sponsored by HP, AMD and Ingram Micro on the topic of selling technology as a service and allowing customers to pay over time for solutions rather than upfront. Their discussion included real-world examples illustrating how Ingram Micro can help partners struggling with self-funded as-a-service offerings using Ingram Micro’s Flexible Payment Solutions (FPS)
Some of the financing options available in FPS include:
- 90 days same as cash: Partners are given 90 days to decide if they can pay upfront or need to enter into a long-term finance agreement. No interest is collected during the 90 days.
- Future funds: In this case, the partner makes six interest-only payments and then has the freedom to decide if they can pay off the principal or enter into a long-term agreement.
- Baker’s dozen: The funded amount is divided by 12, and the partner can make 13 smaller payments if needed.
Besides removing partners’ cash flow and liability burdens, FPS makes it easier for partners to offer bundled solutions, such as HP and AMD PCs, printers and servers bundled with endpoint security software. As a result, these bundled as-a-service offerings help partners shorten the sales cycle and standardize products across their customer base. Combining HP and AMD hardware with Ingram Micro FPS is a clear win for partners and for their customers.
To learn more about selling technology as a service and Ingram Micro FPS, check out episode 10 of the AMD, HP, Ingram Micro vlog, featuring Ingram Micro’s Heather Kopp and Aaron Lehman.