Cisco Partner Summit is around the corner, and we have assembled a few key learnings and thoughts to help you with your conversations regarding the business model transition to recurring offers that is underway.
- It’s all about software and subscriptions
Gartner analysts predict $3.7 Trillion in 2018 IT spending in two key areas – enterprise software and IT services. This combination of software and services, when paired with attractive financial terms — like spreading payments over the term of the subscription, bundling all elements into a single payment, and budget predictability — represents a prime opportunity for partners to help customers invest in new software and re-think their IT spending through a strategic lens instead of a price-driven deal.
- Best-in-class financial strategies drive best-in-class results
Seventy seven percent of partners still work within a traditional financial model of reselling solutions on a 100 percent pay upfront basis. These traditional financial models require significant capital investment by customers and create stiff financial boundaries for technological acquisition, preventing organizations from adapting to market fluctuation and consumption changes driven by their business needs. New financial models help organizations gain a crucial element of flexibility, creating the ability to pay as they use and preserve cash.
For example, delivering recurring offer models where customers pay over time can benefit both Cisco and partners in a win-win scenario through increased predictability, strategic relevance, and of course flexibility. Cisco Capital can take the risk of funding partners for the up-front cost so their customers can pay over time as the customer organization consumes the solution.
- Solve the cash flow problem, reap the rewards
We have many ways to solve the cash flow issues our partners face in meeting customer needs for recurring payments. In addition, solving these issues is crucial for success.
By embracing recurring payment streams over time and transitioning to pay-as-you-go models like Open Pay, partners can solve cash flow issues and unlock new potential with strategic financial services from Cisco Capital. Whether it is solving these issues through bundled financing, managed services enablement, partner bundled solutions, or simplifying the overall technological acquisition process, they all contribute to a healthier, stronger financial model.
All of these benefits, in addition to solving cash flow issues, also help partners move from traditional financial models to best-in-class, transformational models that enable the agility and flexibility needed to remain competitive in today’s digital transformation.
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