Ingram Micro has added its first formal financing initiative for hardware-as-a-service (HaaS) solutions offered through its Seismic managed services program.
Seismic Solution Financing allows customers to finance hardware along with Seismic managed service offerings into one bill to the customer. The program allows solution providers to be paid up front for the hardware but accrue monthly recurring revenue for the services portion of the deal.
"It's very similar on the [terms and conditions] of [traditional leasing]. The only thing different the lender is doing is bundling in the value of the cost of the technical labor services into the price," said Justin Crotty, vice president, services, Ingram Micro North America.
Ingram Micro previously offered financing for services, but never had a HaaS financing component. Seismic Solution Financing now eliminates some of the manual costs associated with managing and billing the hardware and services costs separately, Crotty said.
"For example, if I sell $1 million in gear into a customer and the service contract is another $1 million over a three-year period, I can't afford to buy that equipment and float it over three years. Now you get paid for it immediately and hand the annuity stream over to the financing company. And you get to include the labor costs into the total cost to the customer," he said.
The offering is available through the Ingram Micro Seismic Virtual Services Warehouse. National City is the primary lender for the program, but other financing sources are also available, according to Ingram Micro.
The Santa Ana, Calif.-based distributor has developed some training and education courses to help customers learn how to offer it to end users.
Ingram Micro hasn't had a lot of demand for HaaS solutions, but that could be because it never offered a formal program, Crotty said.
"It's been a big idea so far. We've been told if you guys had an answer for this, it'd be great. I don't know how many VARs are doing it today," he said.
Dell is reportedly developing a program after acquiring SilverBack Technologies that could bundle managed services into every PC it sells. Depending on its success, it could spur more demand for HaaS solutions.
"Ultimately, that would be our objective as well," Crotty said. "I still see that Dell has a huge hurdle to get over on the whole channel. The VAR owns the customer and they don't want Dell's tentacles in there."
There is no minimum purchase required for the offering. Ingram Micro expects the average minimum order size to be about $25,000.