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Case study: Build recurring revenue with POS as a service

MSP sells POS as a service to an international transportation company.

June 17, 2019

When it came time for an international public transportation company to upgrade the POS (point of sale) system it uses for passenger food and beverage service, the company wasn’t sold on sleeker hardware, or faster software. Rather, the company was impressed with the total solution presented by a managed services company that specializes in creating custom solutions and bundling them as a service.

Upon initial meeting, the transportation company had an aging POS system that wasn’t meeting current demands. POS terminals were fixed, as were the payment devices. The transportation company sought a mobile solution to provide better customer service. In addition, the software being used wasn’t able to be customized to meet the exact needs of the transportation company.

The MSP’s solution was to replace the traditional fixed POS terminals with the HP Engage Go Convertible system. These devices have the ability to be mounted or removed to accommodate mobile order entry. Additionally, the MSP selected Ingenico iSMP4 mobile payment terminals. Key injection of the terminals was done through Ingram Micro, ensuring the security of the devices and shortening the setup and deployment time for the MSP and customer.

Due to security requirements, the new solution needed its own network to operate. Therefore, the MSP installed new Cradlepoint COR Series mobile routers with SD-WAN capabilities. The local wireless LAN radios are used to communicate with the POS units for order entry. When credit cards are processed, the access point uses a cellular radio to securely process the transaction from anywhere.

Where the MSP truly separated itself from the competition is with its services. Rather than use out-of-the-box software that was missing certain features the transportation company required, the MSP developed a custom POS application for the customer. Currently, the software is used for food and beverage orders. Eventually, the software will also be tied to the transportation company’s ticketing system to allow onsite purchases.

Build monthly recurring revenue by offering everything as a service
Another distinguishing characteristic of the project is how the MSP charged for the solution. Understanding the value of recurring revenue, the MSP sold the entire solution to the customer “as a service.” That is, the hardware, software and service work was sold as a multi-year contract with monthly payments.

Solution providers interested in this model have two funding options: pay for the entire solution themselves (hello, cash flow challenges) and charge the customer a low monthly fee, or work with a partner that can offer creative financing services. Most solution providers opt for the second option, and that’s exactly what this MSP did when they called Ingram Micro. Not only was Ingram Micro able to supply all the hardware and handle the key injection, the distributor had several financial options available that made it possible for the MSP to offer the customer a low monthly fee while building the MSP’s monthly recurring revenue.

The project is currently in the first of what will be a two- or three-phase rollout. In the end, the MSP will deploy more than 360 mobile POS units, payment terminals and many more access points. Even greater, the MSP has proven that future sizeable DCPOS projects can be funded and made profitable with Ingram Micro’s assistance.

If you’d like to learn how your next DCPOS project can earn you monthly recurring revenue—and how Ingram Micro can help—contact Daryl Schuster.