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Tech Data Gives As-A-Service The Utility Bill Treatment

Tech-as-a-Service for Advanced Solutions allows partners and end users to bundle data center hardware, software and services into a consumption-based pricing model in which end users pay only according to the resources used.

Tech Data unveiled aprogram at its Tech Select Partners Conference Tuesday that is turning technology as-a-service toward a utility-company-style billing model.

“This is more like paying your electric bill,” Jolea Kidd, vice president of financial solutions, Americas, at Tech Data, told CRN. “You only pay for what you use.”

Tech-as-a-Service for Advanced Solutions allows partners and end users to bundle data center hardware, software and services into a consumption-based pricing model in which end users pay only according to the resources used, she said. This program frees the use of the hybrid model from big up-front expenses by allowing customers to have private, dedicated hardware either on-premises or in a co-location and pay for it as if they were in the public cloud, Kidd said.

“Speaking to our customers, what we heard was their customers want to have the ability not only to flex up, but to flex down in usage,” Kidd said. “That’s something that we didn’t see out there. This particular program allows them to do that. There’s no minimum usage requirement. So the flexibility is great for end users who have varying workloads. Seasonal workloads. That type of thing.”

[Related: Tech Data, Cisco Partner For Simplicity]

Anthony D’Ambrosi, president of ATSG, a Manhattan-based MSP and Tech Data partner, told CRN this program can help partners as well as customers by adding scalability to the MSP’s own cloud service.

“We built, own and operate our own private cloud,” he said. “So, I’m a cloud computing company as well. The idea of adopting that program to scale out my own use of cloud computing is wildly intriguing to me. The offset of Capex to Opex, rent the capacity I need, expand the footprint, go variable in terms of some costing models and consumption models, back to back with customer consumption. I see that program as fuel for my private cloud strategy in a way that offsets my need to deploy capital.”

Jennifer Schaeff, manager of financial services at Clearwater, Fla.-based Tech Data, said the buildouts are designed by the partner and the sales team in consultation with the end user.

“The sales teams are basically industry-driven, or partner-driven, aligned to what’s appropriate for that particular customer,” she said. “It could be that they’re working with a sales rep who is handling a particular vertical. So in that case they would already be in that path. We’re just a tool for the sales team, and the partner to utilize to get a deal over the finish line.”

Kidd said one of the more appealing features is that the program’s structure allows costs to be treated as operational expenditures versus capital expenditures. In addition, monitoring tools allow visibility into consumption as well as chargebacks to specific areas.

Research firm IDC predicts that by 2020 consumption-based procurement in data centers will have eclipsed traditional procurement through improved "as-a-service" models, thus accounting for as much as 40 percent of enterprises' IT infrastructure spending, according to Kidd.

“We know this particular model is how the future is going to shape up,” she said. “We want to make sure that what we offer is what people are looking for.”

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