Louisville, Ky.-based AccuCode has spun off a new company to outsource managed services and recurring revenue for VARs and other channel players, which it says will help them make a more seamless transition to services and recurring revenue models.
InDemand Technologies will supply VARs, OEMs, ISVs and distributors with the managed services they need to shift into a recurring revenue model. Instead of accumulating costs to build those practices themselves, channel partners can outsource their managed services to InDemand.
"InDemand becomes a channel-only partner whose job it is to go enable the as-a-service model. Whether that’s a hardware OEM, ISV, VAR, if they've got a managed service business model and they need to fill in gaps they can't fill in themselves, that's InDemand's job," Kevin Price, CEO of AccuCode, No. 445 on CRN's 2013 SP500 list, said.
The problem for many solution providers, however, Price said, is that the switch can be expensive as the companies look to completely overhaul their business model or add on another portion of the business.
"InDemand's role is to eliminate the financial barriers for the hardware OEM, the distributors, the VARs, the software ISVs, everyone in this industry ecosystem, to make that shift into the recurring revenue model and eliminate that cost to the customer," Price said.
The services are sold on a monthly subscription basis, which the company said saves the channel from large up-front costs. Each package is bundled for the individual channel partner to match their needs.
ScanSource has been taking advantage of the InDemand services, and President of ScanSource POS and Barcode Paul Constantine said that the services are helping the company move its partners into a more profitable business model.
"InDemand has created an impressive services offering that resellers can leverage to provide a broader menu of life-cycle services to their end-user customers. By making the systems, processes and infrastructure that InDemand has built available to VARs, we can help our channel partners transition to a more profitable services-oriented model," Constantine said.
The industry has been talking about the switch to the recurring revenue model for at least five years, Price said, but many companies are struggling to build the tools and processes to make the switch themselves.
"The market's clamoring for it and the customers are asking for it. The channel's asking for it. The OEMs are talking about it for a few years, but can't get their heads around the capital expenditure," Price said.
InDemand can help the channel take on services such as spare pool management, next-day replacement, staging and configuration, deployment, help desk support, remote device management and more.
"Our job is to help the channel partner succeed," Price said.
PUBLISHED APRIL 11, 2014