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Ingram Micro Unveils Hardware-as-a-Service To Drive More Recurring Revenue Business

Ingram Micro will make it possible for solution providers to rent new or refurbished devices bundled with cloud and managed services to their end users with only a three-month commitment.

Ingram Micro has set out to simplify the equipment procurement and billing process for channel partners and customers with a Technology-as-a-Service program.

The Irvine, Calif.-based distributor will make it possible for solution providers to rent new or refurbished devices, bundled with cloud and managed services, to their end users with only a three-month commitment required, according to Kelly Carter, executive director of Ingram Micro Financial Services. Both hardware and services are bundled into a consolidated monthly invoice, Carter said.

"Partners need multi-vendor solutions they can bundle together," Carter told CRN. "This isn't common, and it's a real differentiator for us."

[Related: Ingram Micro Unveils Microsoft Surface, Other Devices On Cloud Marketplace Under Annuity Model]

Carter said Ingram Micro's Hardware-as-a-Rental program would initially focus on refurbished laptops under warranty with associated cloud services, expanding into other product lines and new equipment as time progresses. The distributor was unable to immediately provide a list of vendors participating in its Hardware-as-a-Rental program.

Ingram Micro definitely wants to phase in infrastructure under its Hardware-as-a-Rental program, Carter said, though the distributor would have to combat steep price depreciation around new products.

For this reason, Carter said the distributor needs to examine how long hardware is typically held under the current financing and incentives structure to ensure Ingram Micro has a fiscally responsible way to offer new infrastructure hardware at an attractive price point.

"This is not easy, and that's why you don't see a lot of it out there today," Carter said.

Carter anticipates the ramp-up of Ingram Micro's Technology-as-a-Service program will be rather slow as solution providers determine how to best go to market with this. The distributor has added people to its financial services team to assist partners around the go to market strategy, Carter said.

Although vendors have started coming out with their own hardware-as-a-service offerings, Carter said Ingram Micro's program stands out since it is tailored to a multi-vendor ecosystem and allows solution providers to bundle in their own managed services under a single invoice.

Distribution competitor Synnex announced a Device-as-a-Subscription program in March that allows users to bundle client devices with managed services such as patching, help desk services, and Office 365 Enterprise or G Suite for a two or three-year subscription period.

In addition to Hardware-as-a-Rental, Carter said Ingram Micro had enhanced its hardware leasing program (lease terms are normally three years) to allow for the bundling of reseller managed services while still providing the end user with one bill for the entire technology solution. Ingram Micro will sometimes pre-fund a portion of the services, Carter said.

Ingram Micro is also working on resellers on custom solutions where they lease their own equipment to customers and incorporate their own services, Carter said. The distributor has programs in place that will fund a portion of partners' upfront costs to help facilitate their shift to a managed services or recurring revenue model, Carter said.

Ingram Micro's entire channel community is eligible to participate in its hardware leasing and Hardware-as-a-Rental programs, Carter said, though the distributor plans to set a higher bar in terms of qualifying for one of its custom agreements.

"We're definitely looking for a partnership at this point because we're making an investment into their business and their managed services," Carter said.

Variable, consumption-based payment options are available to end users for the managed services portion of the equation, Carter said, though the equipment can only be procured on a subscription basis for the time being. Under the plan, Ingram Micro will bill end users on behalf of its channel partners, though the distributor is willing to white-label invoicing on the partners' behalf.

The amount of the per device monthly payment is currently fixed under Ingram Micro's Hardware-as-a-Rental program regardless of any scaling up or down of devices or the duration of the rental, Carter said. Ingram Micro hopes to reduce the per-month price for longer-term rentals as the distributor incorporates more products into the program, Carter said.

Platte River Networks had been looking at going in the Technology-as-a-Service direction itself but said doing it through Ingram Micro will dramatically simplify the process, according to David DeCamillis, vice president of sales and marketing.

"If the customer defaults, that's not on us," DeCamillis said. "We don't have to take that credit risk – that's huge."

Although the Denver-based Ingram Micro partner is fine with refurbished desktop or laptop devices, DeCamillis said Platte River would only be interested in brand new equipment from the server or infrastructure end.

Shifting to a Hardware-as-a-Service model will make spending more much predictable for both channel partners and end users, DeCamillis said.

It will also make it easier to get customers to sign up on infrastructure upgrades since they won't have to incur the entire capital expenditure upfront.

Platte River plans to start by hitting up customers who are having performance issues but haven't signed up for upgrades, DeCamillis said. From there, DeCamillis plans to extend the Technology-as-a-Service to new prospects, offering them the option of procuring just services or services as well as new equipment.

Finally, DeCamillis said Platte River plans to raise Technology-as-a-Service with existing customers during the account review process to see if they want to make things easier on the accounting department by taking procurement out of the equation.

"The majority of the customers we have are in a good situation," DeCamillis said. "This program will help with the ones who are not."

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