If becoming a cloud provider is challenging your profitability, you’re not alone, says Jason Bystrak, executive director, cloud, North America, Ingram Micro. He teamed up with market development executive Melanie DelValle to relate solutions for the two most common hurdles.
Challenge No.1: Moving to Recurring Revenue
Unlike an on-premises solution, where net 30 is typical, “selling the same solution using a subscription-based cloud model shifts revenues to fixed monthly payments, which means capturing the same amount of revenue and stretching the profit over 12 months or more,” says Bystrak. While recurring revenue models are profitable over time, the transition can cause significant gaps in cash flow.
Solution: An exclusive Lending Club partnership offers two alternatives, a line of credit and a term loan, which can be accessed via the Ingram Micro Marketplace:
- Line of credit—Whether purchasing solutions, such as cloud subscriptions or site licenses, from Ingram Micro or transferring invoices from an Ingram Micro Term line to a Lending Club line, a line of credit with flexible payment terms “enables matching your revenue stream to your repayment terms,” DelValle says.
- Term loan—Available for any business need, such as headcount or infrastructure, a term loan supports the working capital required during a transition to a recurring revenue model. A fast application process and attractive rates are among the benefits of using this program versus a more traditional financial services option.
Challenge No. 2: Funding the Hardware-as-a-Service Paradigm
Once customers start achieving value from shifting software to the cloud, they frequently begin asking for hardware-as-a-service (HaaS) to align their purchasing while cost-effectively providing employees with the latest innovations. Many channel partners lack the capital to invest in hardware on behalf of their clients and then invoice it as a subscription.
Solution: Integrate leasing into your overall portfolio with Ingram Micro Lease-IT. This program permits either you or your customer to be the lessor, giving you the flexibility to offer HaaS by leasing equipment from Ingram Micro, adding value to it and charging your customers a fixed monthly rate.
Whether your business is born in the cloud or transitioning there, Ingram Micro’s financing team specializes in designing streamlined and customized solutions to fit your—and your customers’—individual situations.
To learn more, contact Melanie DelValle at (716) 633-3600, ext. 63165 or email@example.com.