Tech Data has introduced what it calls Tech-as-a-Service, continuing the move in distribution financing towards subscriptions that include not only cloud services, but also hardware and software.
The program, which primarily covers endpoint computing devices, software, and services, aims to allow solution providers to go to their customers with a flat rate cost per month for their endpoint computing needs, and offers upfront payments for the full value of the purchased products and services for the partner, making it especially palatable to partners new to subscription services, since it can to a degree offset the revenue gaps prevalent when partners ramp up cloud and other recurring revenue offers as part of their portfolio.
The distributor has already been offering subscription offerings for data centre technologies on a consumption-based model through its Capacity Now program, acquired when Tech Data snapped up Avnet Technology Solutions last year. The success of that program had a lot to do with the move towards TaaS, said Linda Rendleman, Tech Data’s vice president of product marketing for endpoint solutions.
“We knew we had that area covered from a DC metered compute/storage area, but we also knew we wanted to put together an endpoint offer that’s compelling, that’s aligned with how customers buy today,” Rendleman said. “We’ve seen offerings come out that are specific to type of device, specific to vendors or limited number of vendors but customers don’t just buy five of these one thing — they want choice.”
The choice of any vendor’s device, and any device within that vendor’s portfolio, is a big differentiator for distributors as vendors begin offering their own device-as-a-service packages — as is the ability to add any software to the mix, and even distributor- or partner-delivered services, as part of a single monthly payment.
“[A customer] might want one brand of workstations for analysts, another brand of two-in-ones for the field sales team, and premium machines for executives from a third, and we can support that,” Rendleman said.
It doesn’t necessarily conflict with those vendor-specific device-as-a-service offerings, Rendleman said. While many vendors would like customers to standardize on their products — and indeed, some customers will — they also recognize that the DaaS market, much like the device market in general, is not a monoculture. “Vendors want to capture the subscription demand that’s out there, and however the customer wants to place that order if fine,” she said.
The program also offers flexibility, both upwards and downwards. Rendleman said customers can scale down by up to 15 per cent from the terms of their deal, should they need to. And of course, they can grow their subscription as need be as well.
The program requires a total of $10,000 (U.S.) in purchased technologies, so might not cover the small end of SMB, but Rendleman signaled the distributor would “bring that in later in the year.” They’re focused on the mid-market and the small enterprise market with this offering, and while it’s primarily focused on endpoint, some infrastructure can also fall under the program.
“Everything but metered technology can be included in the subscription,” Rendleman said.
TaaS subscriptions are available now in the United States, and Rendleman indicated the program would launch in Canada in this quarter. It’s not a technical or systems issue that’s keeping it from coming north of the border, Rendleman added, but rather a desire to “ensure we have everything dialed in” and contract in place before bringing it to Canada.
This kind of subscription program is a hot topic in distribution at the moment — at its One Ingram Micro event last month in Dallas, Ingram spent a lot of time talking up new and flexible financing options it was bringing to market, including its own take on this kind of as-a-Service packaging of hardware, software, and services.