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Let the subscription economy boost endpoint revenues for the channel

Roman Rudolf, VP, Strategy and Services at Tech Data Europe, outlines the benefits of Technology-as-a-Service for resellers and their customers 

Throughout 2021, demand for endpoint devices like smartphones, peripherals and tablets has boomed in Europe. One study from IDC forecasts over 12% year- on-year growth for these devices. 

So, endpoint looks like a good market for the channel, with market segments including the public sector and education wanting to invest in new digital devices, according to research from IDC, as well as SMBs. 

Yet, these segments also need to justify technology investments when budgets are tight. It is key for them that the channel can make investing in new endpoint devices affordable and thus more accessible. This means pivoting from transactional selling to a Technology-as-a- Service (TaaS) offering. 

Fostering long-term relationships 

TaaS subscription models are not new; they have been used by software resellers for many years. For hardware resellers, however, using a subscription model for packaging up a bundle of endpoint devices, including PCs, tablets, smartphones and peripherals, is relatively new. 

Paying for equipment through a fixed monthly fee makes it easier for the end customer to commit to a major outlay on the technology that’s essential for their operations, while providing the reseller with a new source of regular income from the fee paid by the customer. 

Hardware resellers may be sceptical about this model, due to some customers’ suspicions about decreasing hardware value. However, a correctly configured TaaS system can simplify the way a customer upgrades their technology over time, in the same way that you might lease a new car for a few years and then upgrade to the latest model by extending the lease for another period. 

For customers, a TaaS model for endpoint hardware is seen as operating expenditure, which is more appealing than capital expenditure. 

A TaaS scheme can also facilitate technology renewal by supporting the replacement of old products, for example by ensuring all sensitive data has been properly removed from devices before recycling, which also helps reduce the cost of acquiring new technology for the end user. 

In creating the right financial packages, it is helpful if manual intervention is limited and the process is fully automated. 

Improving finances for customers 

The pandemic and transition to a new hybrid working model has highlighted increasing demand and need for computing devices. However, some sectors, such as retail and hospitality, have faced long periods of total or partial shutdown and aren’t as financially strong as they were, while others like the public sector and education have tight IT budgets and can’t afford to keep investing in the newest endpoint devices. 

It is becoming apparent that for resellers to create new opportunities, financing packages and flexible funding should be offered. While some resellers may be concerned about their ability to deliver such packages to their customers, a TaaS solution gives them access to a variety of financing options and can automate the required processes to fund investments in new and affordable devices. 

Making the switch 

GEEX, a British IT support company and Tech Data partner, made the switch to a TaaS model after its first 10 years in business and, thanks to a simpler buying process and ability to provide customers with the latest devices, is now enjoying better than ever client relationships. Importantly, the TaaS model has also proved to be lucrative. GEEX has grown its turnover to more than £2 million, with leasing now making up 80% of its overall business. 

Another Tech Data partner, Italian telecommunications business Gruppo Aura, used the TaaS model as a dependable and easy-to-use solution at the start of its partnership with Vodafone and Apple. Previously, customers used a financial lease, but were unaware of the amount they would have to pay at the end of the contract. TaaS enabled Gruppo Aura to create customised solutions for development, integration and financial management, including sales assistance, and as a result it was able to provide innovative, flexible alternatives to traditional purchases that gave users the benefits of iOS and macOS devices, tax advantages and the ability to renew each device after 24 to 36 months. 

Efor, a technology consultancy in Spain and Tech Data partner, has utilised TaaS to predict clients’ present and future needs and so nurture more secure and flexible relationships. Arrangements can be adapted in line with changing financial needs, giving customers agile financial solutions to complement their digital transformation. 

The TaaS model has been beneficial for many software resellers, and hardware resellers are now jumping on the bandwagon, bringing benefits to them and their customers. It enables resellers to create long-term customer relationships and automate processes for ease of use. At the same time, customers receive the latest endpoint devices at a lower cost and do not need to concern themselves with the secure disposal of old devices. The TaaS model allows for easier customer management and supports resellers by giving their customers an inexpensive way to obtain the latest hardware. 

www.techdata.eu 

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TechnologyReseller: 2021