Partners On Recurring Revenue Business

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Whether or not partners continue to sell hardware, there is no denying the growing margins are in services-based recurring revenue opportunities. Recently, it seems that everyone in IT is transforming into a managed services provider on some level.

"Recurring revenue, it's just really important," said Dimension Data CEO Mark Slaga. "It's where we're investing to grow. It's things like the cloud, but it's also around managed services and, I'll call it, complex managed services."

"About 60 percent of our revenue is recurring," said New Signature’s David Geevaratne. "We've been focused on recurring revenue since Day 1 in 2003, honestly. So, it wasn't that big of a transformation for us."

IBM partner Corus 360 is seeing the bulk of its recurring revenue from cloud services and the x86 blade server business.

"We probably run 20 to 25 percent of our business on a recurring revenue model right now," said Corus 360's Michael Chapman. "And we do have cloud services that we provide to our customers."

Chapman said that area of business continues to grow, because now customers increasingly "have confidence" that putting data into the cloud and investing in virtualization is "not much of a risk for our data."

For CCS CEO Blake Schwank, recurring revenue is a huge part of his business' success. "About 95 percent is recurring revenue, and what we've started with a lot of the wireless and security and backup is just doing a Haas model on that, where we actually own the equipment and we rent it out to them. It works a lot better because they [customers] don't have the big up-front cost."

PUBLISHED NOV. 10, 2014