MSPAlliance Members Get Access To Hardware Financing Program

More than 25,000 managed service and cloud providers now have access to financing programs to help them buy and install hardware without cash-flow challenges.

The agreement between GreatAmerica Financial Services, Cedar Rapids, Iowa, and MSPAlliance, Chico, Calif., will allow MSPs to roll out cloud, hybrid or on-premise offerings with just a single monthly payment.

"This is a natural fit," said MSPAlliance CEO Charles Weaver. "Both sides will immensely benefit."

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The biggest expenses and heaviest lifting for MSPs often come at the start of a project when they need to purchase and install hardware, said Greg VanDeWalker, senior vice president and general manager of GreatAmerica's communications and data group.

Many customers are looking for their MSP to architect, manage and equip a private or hybrid cloud solution, Weaver said.

"Many times, the project work can put solution providers behind from a cash-flow perspective," VanDeWalker said.

But GreatAmerica can help them transition from getting money up front to a recurring revenue model. The lack of a large up-front cost also should help with attracting with customers, VanDeWalker said.

The finance company will advance 90 percent of the hardware purchasing cost to MSPs with a Platinum rating in MSPAlliance's Unified Certification Standard program, VanDeWalker said.

Platinum-rated MSPs also will have access to lower lease rates, higher rebates and custom-branded documentation.

Partners with a Gold rating are eligible to have three-quarters of their transaction cost advanced by GreatAmerica, VanDeWalker said, while those with a Silver rating can have half of the purchasing money advanced.

The Unified Certification Standard rating should reassure GreatAmerica that it is lending money to reputable MSPs, Weaver said. The review encompasses both technical proficiency and financial health since Weaver said money issues doom MSPs more frequently than a lack of technical acumen.

GreatAmerica hopes to attract 100 to 150 of MSPAlliance's 25,000 members to its financing packages, VanDeWalker said.

This is the first time the financing company is making pre-packaged programs available to members of a particular organization, which VanDeWalker said should help with tapping into a new style of MSP. Likewise, this is the first time MSPAlliance has partnered with a financial services group.

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Weaver said many MSPs encounter roadblocks in areas such as bundling services, writing effective service agreements and listing invoices when attempting to transition to a leasing model. In fact, MSPs have faced audits from state revenue departments as a result of incorrectly accounting for hardware-as-a-service revenue.

GreatAmerica has seen 500 to 1,000 MSPs and cloud providers sign up for its financing program over the past five years, VanDeWalker said.

The benefits of GreatAmerica membership can also be felt when it comes time to collect cash from end users. VanDeWalker said GreatAmerica's dedicated sales and operation teams can typically recoup money from businesses faster than MSPs could on their own.

Weaver said the leasing model also levels the playing field for smaller MSPs by allowing them to provide a broad selection of cloud products and services without emptying their back accounts. With third-party support for infrastructure build-out, smaller MSPs can be competitive in the private cloud.

Moreover, the monthly payment plan makes it simple to replace hardware as it becomes outdated or stops working effectively, VanDeWalker said.

Virtually every MSP customer will need some hardware, he said, even those who migrate entirely to off-premise cloud.

"If it's a pure cloud solution, the customer still needs a desktop," VanDeWalker said. "They still need keyboards."

Additional professional services such as help desk or remote monitoring also can easily be bundled into the single monthly payment, he said.

Ntirety, Dedham, Mass. has earned a Platinum Unified Certification Standard rating due to its security and ticket processing protocols, said President Michael Corey. He said the MSPAlliance seal of approval has helped him win business with financial services firms, whose compliance people are often impressed by the rigor of the examination.

He said GreatAmerica's financing program should make it easier to close deals and deliver high-quality services from the cloud.

"I have a new bag of tricks that helps differentiate me from the competition," Corey said. "I love it."