How ‘As A Service’ is changing the channel
Read our paper concerning the ‘As A Service’ offer and find out more about subscription-style models that have already come to dominate the software market.
The appeal of ownership is obvious to many, however as technology becomes more advanced, ownership becomes less alluring. Why buy and store physical newspapers when an online subscription can make every issue available on publication?
With this in mind, the rise of the subscription economy shouldn’t come as a surprise. According to an Economist Intelligence Unit report, some 80% of customers are already actively seeking new consumption models.
Subscription models, which offer access to tools instead of ownership, have already come to dominate the software market. The global SaaS industry is huge, and it’s only expanding further.
Selling IT as a product may be second nature to you by now, but today’s upfront revenue may well be tomorrow’s commercial dead end. Embracing subscription payment models is the best way to survive and thrive in the near future. Partnering with a leasing provider will make the transition easier.
Head of the Information and Communication Technologies Market
BNP Paribas Leasing Solutions Europe
WHAT ‘AS A SERVICE’ SOLUTIONS ARE AVAILABLE?
‘As a service’ is a term that refers to the wide range of IT solutions available on demand. There are already a wide range of services available, but as the industry grows in importance and profitability, the options will increase in kind.
HARDWARE AS A SERVICE
Rather than purchasing hardware such as scanners, routers and servers outright, HaaS allows businesses to pay for access.
SOFTWARE AS A SERVICE
Instead of purchasing perpetual software licenses, a business subscribes for access and receives services delivered over the internet.
PLATFORM AS A SERVICE
PaaS isn’t all that different from SaaS – except that its services are designed to facilitate software creation.
INFRASTRUCTURE AS A SERVICE
Infrastructure as a Service allows your clients to benefit from cloud computing infrastructure. That means that instead of buying their own data centre space and servers, they outsource it to an ondemand subscription service
WHAT ARE THE BENEFITS FOR THE IT CHANNEL?
A customer who subscribes to a products and services is naturally more inclined to maintain the relationship with the service provider over the longterm. Retention is more profitable than acquisition: where a one-off payment might provide immediate gains, it brings no assurance that your most important consumers will return to buy again. When you’re the customers’ XaaS provider of choice, it’s much easier to retain customers, predict your revenues, and widen your profit margins over a longer period.
VALUE ADDED SERVICES
Resellers are in a unique position to benefit from XaaS. Being able to package several products and services together gives you a distinct advantage. If your customer requires help with setup and implementation, you can roll these costs into the monthly fee; if they require applications from a different software suite, you can include it in the overall cost; if they need to scale up their solution, their package can be revised to accommodate this need. When you can tailor your offering to the precise long and short term needs of your customers, it becomes much easier for you to forge meaningful, long-term relationships with them.
GIVING THE PEOPLE WHAT THEY WANT
Resellers should think of new payment models as an asset and a vital part of their evolving business models. Customers who cannot get the financial flexibility they desire from your company may well look to competitors who can provide it. A reseller who is unwilling to adopt new payment models may well risk being left behind by their more adaptable rivals.
WHAT ARE THE BENEFITS FOR CUSTOMERS?
Conventional payment models tend to conflict with the end-user’s capital expenditure restrictions. The latest edition of a certain software product might be appealing to them, but if it’s also likely to cause a significant hole in their annual budget, they’re likely to defer the purchase until they have no alternative. XaaS products offer immediate access to the best products available, with little upfront investment, and with tremendous value for money. Cloud based solutions can also automate updates and upgrades – saving them time as well as cash.
Though there will always be exceptions, most customers are less concerned with control than convenience. XaaS models are very convenient: the heavy IT lifting is done by the reseller and the vendor. No wasting space on server rooms; no wasting time and manpower on maintenance; no building an on-site enterprise infrastructure. All data is stored and backed up offsite. All the customer has to do is pay their subscription fee and stay connected to the internet.
XaaS models offer unparalleled flexibility. They make it possible to scale upwards at the customer’s convenience, so if an enterprise or SME needs additional capacity or licenses, their request can be accommodated easily. If they need training or assistance with setup and support, it can be rolled into the final agreement in one convenient monthly, quarterly, or annual payment. Customers love choice. Give it to them, and they’ll have every incentive to choose your company.
We provide technology providers with finance solutions they need to plan their business transition towards a cloud model. We let you adapt your customer payment schemes to the new era of subscriptions, accommodating both pay-as-you- go and bulk purchase options.