Video Above: The benefits of HaaR for Managed IT Service Providers and their end-user customers.
The large upfront costs involved in selling Information Technology (IT) hardware can be a big roadblock for solution providers. But Hardware as a Rental (HaaR) is making it possible, even for smaller office technology dealers and Managed IT Services providers, to enhance their managed IT go-to-market strategy.
Over the last few years, solution providers have increasingly relied upon monthly service contracts as a source of profit. Programs like HaaR (hardware as a rental), join together the best features of Hardware as a Service (HaaS) and IT equipment leasing to bring value to their customers while opening a new channel for monthly recurring revenue (MRR).
Just as with other As-A-Service models, through HaaR you can offer your customer a single monthly payment that bundles together charges for all hardware, software, installation, and services. Providers receive funding for the project up-front, and once delivered and installed, will instantly begin collecting recurring charges as the customer makes their monthly payments. This arrangement allows office technology providers and MSPs to sell and support hardware for their customers without exposing the provider to the financial risks involved in a standard HaaS agreement.
Bundling equipment, software, and services all on one invoice makes life a lot easier for your customers. Additionally, the HaaR model helps providers to overcome the price objections of their customers, since it’s much easier to justify a small monthly payment over a large up-front cost. Many kinds of Managed IT Services can be billed without supplements, which provides a streamlined experience for your customers and more flexibility for you.
By offering HaaR, you’ll enjoy the advantage of another source of monthly recurring revenue. Though providers will obviously enjoy an instant increase in profitability and a boost in recurring revenue, the benefits go beyond that. Consistent recurring revenue will also make it much easier to predict profitability from one month to the next. As your customers make consistent, monthly payments, you’ll normalize your various pricing plans and billing periods into a single dependable number that you can use to track your growth over time.
Out with the old, in with a new, standardized stack! With HaaR, providers ensure each of their customers have a standard stack, which makes for fewer hiccups in the long run. Issues that do arise will be much easier to address because everyone is trained and familiar with the same technology.
Hardware and systems are proactively monitored and tested routinely which means most problems are fixed before they are even noticed. When trouble does strike, there's far less downtime because a standardized stack will mean problems can be addressed more efficiently by experts who know the equipment inside and out. This creates peace of mind for your customers.
For startups or businesses running on lean budgets, cutting edge technology can be hard to get a hold of. However, certain hardware and equipment are still necessary to conduct business. Through HaaR, customers are able to upgrade at the end of their term, helping them to stay current with the latest technologies.
HaaR provides the support and flexibility your customers require in order to upgrade their hardware when they need to. The previous section discusses how important it is to stay current with technology and one big reason for that is security. As technology continues to evolve faster, staying ahead of security concerns will only become more crucial. HaaR can include managed security services as a value add to your customers, which will help them avoid security vulnerabilities that can be caused by out-of-date hardware and software. This alone can save your customers a lot, both in terms of dollars and reputation.
Too often the maintenance and protection of the network is not made a priority due to its high initial expense. Since HaaR bundles services, including maintenance and the cost of the equipment into one monthly payment, your customers won’t have to worry about spikes in costs. The HaaR arrangement makes IT expenses completely predictable so your customers won’t have to worry about unexpected charges when equipment fails, making their business planning and budgeting much more effective.
Through financing, customers can redirect the large cash outlay they would have spent to purchase and install the equipment toward revenue generating activity instead. Since HaaR requires no large cash outputs to acquire IT equipment, your customers are free to make the most of their capex dollars and invest in other areas that will benefit their business growth. As an added bonus, HaaR services also qualify as operating costs which can be a big benefit come tax time.
A HaaR arrangement truly creates a win-win relationship, bringing mutual value to both office technology and MSP providers, as well as their customers. Solution providers are able to ensure their customers get the equipment they need to be successful in business. As a result, managed service providers become more profitable, allowing them to grow with their customers.
Lindsay Bohon, Vice President and Managing Director of Sales, works with all sales leaders to establish consistency and continuity in the Office Equipment Group. She also oversees National Account programs for this group. She has been involved with lease financing since 1999. Prior to joining GreatAmerica in 2005, Lindsay held several sales and marketing positions at GE Capital. Lindsay received multiple company awards including Appreciation and Excellence certificates and Six Sigma designations. She joined GreatAmerica as a Regional Account Manager for the Southwest Region.