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Synnex Unveils Flexible, Scalable Device-As-A-Service Plan For Partners

Michael Novinson

Synnex has rolled out a Device-as-a-Service program that will enable end users to buy hardware on a subscription basis.

The Fremont, Calif.-based distributor said its Device-as-a-Service offering supports every vendor that is a Synnex client today, according to Peter Larocque, president of North American Technology Solutions.

"If you look at five million cloud seats [sold through Varnex members], it shows that a lot of customers want to buy in a certain manner," Larocque told nearly 500 Synnex conference attendees on Tuesday. "So it gives you [channel partners] the opportunity to sell in that manner as well."

[RELATED: Synnex Rides Cloud Services to Growth, Overcoming Industry SSD and Memory Shortages]

Synnex's new offering provides more flexibility around billing and increasing or decreasing the number of devices in play than anything else available on the market today, Larocque said during the Varnex 2017 Spring Conference in Austin. Larocque said these features are intended to mirror the benefits of buying software on a subscription basis.

"You can scale down," Larocque said. "We're one of the few, if any, programs that I've seen where you're able to do that."

End users can reduce the number of devices they're procuring by as much as 20 percent without having to re-do or cancel their contract, Larocque said. Solution providers can increase the number of devices in use by a client without encountering any barriers whatsoever, according to Larocque.

Under the new plan, Synnex can either bill end users on behalf of its channel partners, Larocque said, or solution providers can use Synnex's tools to collect the bill themselves.

"Those are dramatic differences that what you see from other programs," Larocque said.

Synnex also offers its channel partners the option of handling the residuals, Larocque said, meaning that the distributor will sell the products through PC wholesale after an end customer returns the device. Synnex is also the bank behind the primary service offering, Larocque said, meaning that the distributor has a financial stake in the engagements being successful.

"They like the subscriptions more because they can change on the dime, and increase and decrease in certain areas," said Kirit Desai, CEO of Derive Technologies, a Synnex partner. "Customers are looking to get away from the high-stakes, on-premise stuff."

The biggest obstacle Desai expects to encounter in shifting hardware toward more of a subscription-based model is that salespeople may fear losing upfront revenue. But although Derive might not get the hardware money right away, Desai believes it will benefit his business in the long-run since they will be able to tap into subscription and maintenance revenue and scale with customers as they grow.

Cloud is Synnex's biggest area of investment, Larocque said. In the distributor's 2016 fiscal year, which ended Nov. 30, Synnex recorded a 45 percent increase in its public cloud applications and services business among the 340 members of its exclusive Varnex community.

"We wake up at the beginning of every month with money in the bank from the annuities that we've built from our cloud business," Larocque said.

Varnex members grew their mobility business with Synnex by 40 percent in the 2016 fiscal year, Larocque said, driven by a doubling of activations in the data space over that time. The company expects to go over 300,000 mobile device activations, according to Larocque.

The number of end users being brought in around cloud and mobility is significant, Larocque said, with a doubling in the customer count for those two technology areas.

"It's a land grab," Larocque said. "You start with certain things – maybe [Microsoft Office] 365 or maybe [Google's] G Suite – and then you parallel that up into a more sophisticated business that you could be selling."

Synnex has more than 4,000 channel partners in the cloud and mobility space, Larocque said, and has combined its CloudSolv and MobilitySolv offerings under the domain of Rob Moyer, vice president of cloud and software solutions. Doubling down on verticals such as banking and public safety, as well as investing in augmented reality and building reality, are all key to cloud and mobility growth, he said.

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