Today’s IT sale is shifting from the traditional transaction- and hardware-based model to a recurring revenue business model based on services. If 20–30% of your business isn’t already based on services, now’s the time to get started. Learn more about the recurring revenue model and how you can start making the shift today.
What's driving the recurring revenue model?
More businesses and consumers are subscribing to services rather than buying products. Gartner reports that, “By 2020, more than 80 percent of software vendors will change their business model from traditional license and maintenance to subscription.” Gartner attributes the growth to drivers such as the adoption of the cloud, open-source software and the growth of digitalization and consumerization.
How it affects your business relationships
IT decision-making is changing the sales process, with an ever-increasing need for your sales teams to build and maintain collaborative relationships with IT staff, as well as operational business and C-level business leaders. The managed services recurring revenue model complements this shift by placing a premium on long-term relationships that reinforce your sales team’s trusted advisor or consultative role.
Beyond the relationship, selling services opens the doors to more opportunities. It shifts the conversation from hardware-focused to business-oriented, with an emphasis on the overall costs over time. Finally, services sales can lead to more referrals. If your sales team is talking to the network team, they may refer them to the server team, who may then refer them to the storage team and so on.
Benefits to your bottom line
Transitioning your business model from the traditional transaction- and hardware-based model to a recurring revenue business model isn’t easy. It requires planning, a hard look at your sales compensation model, sales training, and an eye on your long-term business benefits. But shifting to a recurring revenue model via services means your business can:
- Always provide customers the latest, up-to-date products
- Reach each customer and prospect in new ways
- Shift its focus from revenue or margin to cash flow
- Stabilize its profitability with repeatable, predictable revenue streams
Get Started Today
Where do you get started to implement a recurring revenue model stream with services? Call Ingram Micro and our team will work with you to identify repeating revenue opportunities with current and prospective customers.