Follow this series on how to position your business for the future.
“Shh. Shh. Shh. Shh. Do you hear that? It's the winds of change,” whispers Randall to Mike in Sulley in Monsters, Inc. While you might not be focused on being the top scream producer, you are focused on your bottom line. The winds of change lie in successfully transforming your business from hardware-dependent sales to the recurring-revenue model of managed and consulting services. In the next month, our business-model transformation series will explore ways to help you make this transition and position your business as the data center solution provider of the future.
Misperceptions about the recurring revenue model
There’s increasing pressure on hardware sales margins. And the prospect of moving to a recurring revenue model seems daunting. However, pressure’s mounting and business-model transformation’s no longer an option. Still have some objections? Take a few minutes to read McKinsey & Company’s article, “Subscription myth busters: What it takes to shift to a recurring-revenue model for hardware and software.” The five myths the article dispels include:
- You must move to the cloud to make the transition
- Subscription pricing is a zero-sum game between vendors and customers
- Offering both perpetual and subscription terms for the same product is too complex to manage
- The pace of your transition is limited by customer appetite for subscriptions
- Your customers would never give up licenses they already own to migrate to subscriptions
In next month’s blog post, we’ll get business-model transformation perspectives and tips from two Ingram Micro experts, Kelly Carter, executive director of Credit and Financial Services, and Greg Richey, director of Professional & Training Services. Soon, you may be whispering about the winds of change to your competition.
In the meantime, catch up on some of these helpful blog topics: