As you continue transitioning more of your clients’ data centers, infrastructures, and applications to the cloud, this technological shift is also reshaping the financial picture for both your customers and your business. After all, if you’re now providing managed services to a steadily growing number of clients, your data center is now an around-the-clock operation, equipped with the latest technologies and a highly trained support staff. On the client side, your customers are more likely to purchase Software as a Service (SaaS) than software applications.
Cloud computing is expected to explode: The global cloud computing market will reach $241 billion in 2020 compared to $40.7 in 2010, Forrester Research predicts. Within that overall market, Software as a Service (SaaS) could hit the $92.8-billion mark by 2016, according to the research firm.
This evolution, no doubt, is also changing the way in which you look at financing. While you may still sell servers, desktops, and notebooks, along with software licenses and networks—and offer traditional financing programs through distributors, manufacturers, or vendor-neutral third-party financing firms—it’s also a good time to consider new ways of bankrolling cloud-based solutions. These financing options, coupled with your expertise and vertical-market, geographical, or other specializations, combine to differentiate you from competitors, improve your margins, and deliver a compelling message to prospective clients.
A Mixed Blessing
Historically, managed services have provided a rich sales opportunity—but a confusing financing picture.
Solution providers have struggled with up-front hardware costs, rigid financing models, and cash-flow shortages, CRN has reported. In fact, you may find yourself obligated to the equipment debt, paying cash, or using your own valuable credit for customers’ equipment. In turn, this can lead to difficulty obtaining equipment leasing, reduced liquidity, financial constraints, and a slow-down of the revenue recognition.
By finding a financing partner that understands both your business and the cloud, you can eliminate these burdens. Some finance firms underwrite services, as well as hardware and software, freeing-up your resources for internal growth and other needs. If a finance company is only interested in the things they can touch, the hardware and software, it’s probably time to find a new partner, one that really understands your business.
Blue Street Capital, specializes in partnering with solution providers and the technology community. Because of its deep understanding of your business challenges and opportunities, our financial services firm offers 100 percent financing; total solution financing; an array of lease and loan-financing options; a selection of off-balance-sheet financing, and fixed terms for a broad range of equipment types and services. Blue Street Capital finances equipment from $5,000 up to $500,000, working with VARs, vendors, and equipment manufacturers around the United States.
In fact, working with flexible and responsive partner early in the cloud sales process should be viewed as an asset. From Day One, you’ve been able to educate your clients about the inherent savings cloud computing offers. After all, cloud computing is designed to cut companies’ costs by boosting productivity, improving flexibility, and reducing the amount of software required since applications run in the cloud, not on each individual computer. Businesses also need less storage, since data and apps reside in the cloud.
But no matter how much they will save, businesses still must pay the monthly fee that a cloud solution generates. Many clients will be interested in learning that financing is available, just as it was back when they purchased on-premise hardware and software.
A Financial Boon
Creating a lease agreement for your client removes the financial burden from your company and gives you immediate access to some of the contract’s cash value. However, your customer has the monthly payment that, in part, made a cloud solution so attractive. This allows you to recognize revenue sooner, improve operational margins, and enhance financial ratios.
Typically, cloud services include offerings such as unlimited help desk support; 24 x 7 monitoring; service level agreements; asset management, tracking and reporting; maintenance and upgrades; vendor management; security, and reporting. If you finance the deal, not the customer, maintaining the same high-quality support can become an overwhelming, expensive proposition.
Like your business, your finance partner should be flexible. While your finance firm must have templates and procedures to eliminate bottlenecks and ensure speedy delivery of funds, there is room—and a need—for personal service and customization.
Built on a dedication to customized service, Blue Street Capital aims to quickly provide you and your clients with the financing options need to get the deals done. For equipment costs between $5,000 and $100,000, Blue Street Capital only needs a completed application to start the credit approval process. Credit and leasing do not need to be difficult: Blue Street Capital eliminates unnecessary processes so you can spend more time serving your clients and growing your business.
A Full-Service Provider
Vendor-neutral leasing services, coupled with services financing, provide customers with complete financing options. By partnering with a full-service finance firm, you deliver a one-stop shop to clients, a place they can find the business and technological expertise, plus the financing resources they require, without needing to make one more phone call or send another email.
Establishing relationships with finance firms enables you to can address a customer’s business needs and their accounting requirements simultaneously. Your client saves money and time through its new cloud implementation, and your business has a steady stream of monthly income, backed by a finance partner like Blue Street Capital that was built on understanding both cloud technology and the indirect sales channel.
Dave Rhoads is CEO of Blue Street Capital. Are you interested in learning more about financing options for the cloud? I can help: firstname.lastname@example.org.