D&H Distributing’s vice president of cloud Jason Bystrak said the company has developed a way for partners to increase recurring revenue sales by attaching cloud services on top of hardware and devices and pricing that on a per seat basis.
“Why should partners like you monetize a seat?” Bystrak said during a break-out session at XChange+ 2020. “Well first of all it‘s a measurable and actionable metric to drive growth. You can take a look and talking to any customer and ask how many employees are there and then do that same math by multiplying by $5,000 to fully understand the market opportunity. Secondly, this is a scalable sales methodology that you can use to create add-ons and upsell opportunities.”
The total market opportunity for MSPs is massive with about 78 million SMB seats in the US. Roughly 9 million of those are currently monetized on an as-a-service basis, so the penetration of that model is already a known value, meaning there is less friction involved for sales, Bystrak said.
“It really is a win-win opportunity for partners that want to adopt this business model,” Bystrak said. “So the end users, they start to move to a monthly payment model that gives them a predictable cost basis. It gives them a scalable and flexible workforce growth model, so as they add or subtract the number of users within the organization, it helps them to flex that up and down.”
But Bystrack also pointed out that D&H offers partners the total contract value, up front on as-a-service contracts, giving them added cash and flexibility.
“So getting paid for all of the recurring revenue services up front is a great way to increase that cash flow, and you can invest that into other areas or put into the bottom line as profit,” he said. “It helps you to capture hardware refresh by continually offering a service.”
D&H Distributing partner Rich Delaney with Delaney Computer Services in New York City and New Jersey said the company had been a great partner to MSP shops like his and as he evaluates cloud enablement platforms, the Harrisburg, Pa.-distributor is at the top of their list.
“Our company has been around almost since the dawn of the MSP evolution, and most of our cloud partnerships are direct relationships, but in some cases, we may not have the volume that they‘re looking for these days, so in the future we may wind up using a cloud aggregator or a cloud reseller like D&H,” Delaney said. ”I want to make my life easier. I don’t want to sit on the phone for 20 minutes to order a license if their platform messes up, and they have to offer exceptional support. If you’re going to pick a partner, pick a partner that is responsive, caring, and humane, and that’s what I found to be the case with D&H.”
[Editor’s Note: To attend the virtual event or view sessions on demand, visit the XChange+ registration page.]
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