Networking vendor Adtran is targeting managed service providers with a new business model, introducing rent-a-network packages that it says will reduce networking costs for customers, and help MSPs add more recurring revenues.
Under ProCloud Subscription Services, the company will offer a number of its most popular wired and wireless networking hardware offerings on a for-rent basis, bundled with maintenance and services from both the vendor and its MSP partners.
“It’s not a new product as much as it’s a new business strategy, said Scott Stewart, director of ProCloud services and solutions at Adtran. “We’re taking our WiFi access points and managed switches and making them available as a true rental, shifting the network conversation from CapEx to OpeEx. It’s a single part number for the hardware, our ProCloud centralized management platform, which we host for the MSP and they do customized dashboards and alerts.”
Savanna, Georgia-based Speros is an Adtran partner that’s already up and running with ProCloud, and COO Keith Fletcher credits the service with allowing the solution provider to move smaller customers from outdated (but still functional) networking gear to new equipment that meets today’s demands. He said that between the operational expense model and the differences in recognizing depreciation and taxation, taking ProCloud to customers has significantly shortened Speros’ sales cycle around the network. He offers the example of one smaller customer who, presented a CapEx networking overhaul, would have had to take it to the board and likely dragged on with existing infrastructure. But given the ProCloud option, Fletcher said, the customer signed on “within five minutes,” covering the costs of the net network from discretionary funds.
“A lot of IT directors have been trying to get new switches for a long time, but can’t get capital allocation. Now, we’re doing all of their switches, because operational expenditure is under their purview,” Fletcher said. “And after two years, they’re never behind because we’ll do the upgrades to keep them current. I’m not going to predict what the next major business app is that will come along and take up more bandwidth, but I can tell you there will be one.”
Stewart said the ProCloud model is priced “to work for” very small customers, but ultimately scales all the way up to enterprise customers, should they be interested, because it’s a per-device rental.
As it’s a new business model for Adtran, it will also take some new partners. Stewart said the company has seen interest from a number of its traditional VARs, many of whom are well underway in their own transition to managed services and recurring revenues, but will also seek out new managed service providers who have not worked with Adtran — or perhaps even sold networks — in the past. Stewart said Adtran will largely work directly with MSPs on fulfillment, although it is looking to bring on a small number of “master MSPs” to be able to deliver on behalf of smaller partners.
Fletcher said that in addition to the networking gear, management console and Adtran-supplied break/fix service, Speros has been successful in selling a number of services around ProCloud thus far The solution provider typically bundles maintenance (labour and “loaner” replacements in the event of a breakdown) and monitoring with each ProCloud sales, and that many customers — particularly those with internal IT resources — also opt to add network reporting to the mix.
ProCloud Subscription Service is available now throughout North American and in parts of Latin America, with further availability to come. While Stewart said the company is “working with” a number of Canadian MSPs around the offering, no Canadian partners have been signed on as of yet.
