Everon recently sold our first Hardware as a Service deals. This changes things.
Everyone in our industry should be evaluating how they will make Hardware as a Service a core component of their business model. We’ve been talking about it for a year or two at Everon, but we’ve just recently started really making it happen.
This is largely due to what the guys are doing over at CharTec; they’ve put together a fantastic model for companies in our industry to take advantage of. We’ll also be taking advantage of the Zenith products as they roll out in 2010.
Why is hardware as a service such a big deal?
Two words: “Stuck” and “Sticky”.
What do I mean by stuck and sticky? Two important things:
- Stuck – when you sell a hardware as a service solution to your clients, your services are now “stuck” to the technology – they can no longer be separated by the client. This is a HUGE benefit to our business; it totally changes our business model and the equity value of our business. Why? Because it makes your client base…
- Sticky – it’s going to be hard for a client to leave one of these arrangements. They will be making a big financial decision in cancellation penalties to get away from your service, as they will essentially have to pay for the purchase of their equipment and software when they break an agreement with you. As opposed to managed services, which is pretty darn easy to get out of a contract.
If you are not currently offering these services or actively in the process of figuring out how to, please set a New Year’s resolution to get it figured out before January is done – you’ll thank me for it.
MRC
