ChannelVision September - October 2016

74 / 92

To nutshell it, the opportunity for MSPs
is to provide the new generation of busi-
ness owners the tools they expect to run
their businesses efficiently and at a price
that allows them to focus people and
capital on growth.
“The as-a-service economy has be-
come a game-changer for SMBs,” said
Meggin Sawyer, vice president of busi-
ness solutions and cloud services sales,
ADTRAN. “Take a billiards business in
Minneapolis. It has a retail revenue stream
of $3.5 million, and it grew so fast that it
needed to have an inventory strategy. It
spent $30,000 for IT software and retail
point of sale, and found out that it was
losing inventory all over the place. That’s
great, but today in the small business
world, you can buy that in a SaaS format
and spend $300 per month. That’s a heck
of a lot easier for someone to stomach.”
And for the channel, this offers a
more stable cash flow, higher margins,
increased loyalty, higher ROI and more.
To capture the zeitgeist, ADTRAN
has debuted a hardware-as-a-service
offering that makes the network into
a utility that is paid for once a month.
The ProCloud Subscription Services
essentially allow businesses to rent a
high-performance set of network routers
and switches and pay for it just like any
other monthly expense they may have.
Keith Fletcher, COO at MSP Speros,
noted that “the addition of this offering
is permitting us to deliver the highest-
quality infrastructure to our customers
at a low monthly cost. We promote our
business as ‘technology you can trust,’
and our long-standing partnership with
ADTRAN plays a big part in our ability
to provide that high level of reliability
needed to meet modern business
networking needs. This revolutionary
program is virtually eliminating our cus-
tomer’s high capital expense previously
associated with upgrading and main-
taining their network.”
ADTRAN’s subscription services fea-
ture the ProCloud management portal,
which offers a single view into all con-
nected devices across wired and wire-
less networks for each customer. The
services also report trends on network
health and data usage. MSPs can lever-
age that insight to tailor services and
capacity planning, and upsell new solu-
tions and/or services.
Critically, the scheme drives out tech-
nology obsolescence for users, opening
the door for more app adoption (and
sales). “If you’re renting it, you can get
the latest and greatest hardware to sup-
port your apps whenever you need to,”
said Fletcher. “Consider the fact that
older networks can’t support VoIP well.
New switches are optimized for it. Why
spend $15,000 to $20,000 to swap out
your infrastructure when you can sign up
for a $600 per month plan plus manage-
ment included. Five-year-old anything in
the tech world is ancient.”
Sawyer explained that this approach
is supporting overall economic growth.
Many small business customers for in-
stance are running off-the-shelf wireless
access points and old servers, and are
finding that they can’t effectively run im-
portant new apps in that infrastructure.
“As opposed to being stuck because
you don’t have $12,000 for an upgrade,
you can change the whole strategy to
switch to opex and as-a-service, so you
can use the latest and can grow your
business,” she said.
Renting network routers and switches
also offers an upside when it comes to
taxes. Hardware typically depreciates
over five years, so a company can write
off one-fifth of the cost every year. But
the average lifespan for a router is two
years – meaning that companies lose
out on the tax savings for the remain-
ing three years. In a managed service
model, the business can expense 100
percent of the cost, which, over two
years, equates to a 15 percent savings
on monthly payments, based on the tax
agreement, according to Fletcher.
So far, the approach has been lu-
crative, he said. He also added that
Speros has a similar arrangement with
SonicWALL, which Fletcher said has 98
percent stickiness.
Tybee Case Study
As an example of the model in prac-
tice, the City of Tybee Island, Ga., is
utilizing ADTRAN’s ProCloud. As a barrier
island off the coast of Savannah, the
city has become a tourist destination
74 ChannelVision | September - October, 2016
Growth in
Corporate Value
Time
Invested:
Less Than
One Day
Profit Margins vs.
Agent Commissions
52%
15%
Stop Giving Customers Away,
Be Your Own Service Provider