The shift to opex-based IT consumption
There is something a little old-fashioned about setting your clock by product refresh and renewal cycles. When vendors come out and label old technologies as ‘end-of-life’, it invariably acts as a starting pistol for a selling frenzy of newer versions.
What we’re asking is – with the move to consumption-based, subscription-oriented IT driven by customer needs rather than entrenched market habits – could the channel be about to see “the end” of end-of-life?
Customer organisations increasingly want to consume all their IT on a subscription basis, and vendors are transforming their market approach to satisfy the demand. In the middle of all this are reseller partners, and how they react next will decide their future.
There are clearly huge opportunities in adapting to how customers want to do business, especially if you can act faster than your competition. Strategically, it will enable many partners to become more valuable as trusted advisors, able to provide high-value services in support of opex-based IT delivery rather than transacting ad hoc.
Enabling customers to change how they consume technology will naturally mean big changes for how partners sell. Pure IT-as-a-service means no more big tech refreshes, no more kit going end of life, and a whole new way of thinking about renewals. Rather than customer engagements based on cycles and change events, they become continual relationships centred on business value. It puts an end to ‘feast or famine’. Rather than reseller partners employing a salesforce to hunt giant prey (and all the risk that entails), they can instead take an evolutionary leap forward to farming off a reliable and growing source – and gaining stronger, more sustainable yields as a result.
Customer organisations are already shifting more of their costs to opex and pushing the boundaries of digital transformation to satisfy their users’ and business needs for ‘instant everything’. They no longer want IT assets on the balance sheet if other ways of consuming technology are available. This doesn’t mean the death of hardware, just a new way of adopting it.
Take end-of-life kit as an example. The customer doesn’t want to be operating technology that’s 6-7 years out of date – they’ve been driven to do so because they need a return on capital investment. Take that away and you have a different conversation. You’ll find what they really want is the business outcome that the technology delivers – the technology itself is merely the means to an end. In a subscription economy, the fact that the solution consists of appliances, licences and associated services is not the point. It’s all just a service. Costs are predictable, affordable and continual, and the introduction of new generation solutions at appropriate intervals can be baked into the price.
This gives rise to the concept of ‘forever’ customers and transactions, enabled by subscription-based IT. One that relies on a form of consumption that is so easy to engage with, so effective in delivering business outcomes, and so flexible in responding to fast-changing needs that customers become supremely loyal. This in turn requires the partner to adopt a new posture based on delivering a fantastic, customised customer experience. It allows organisations to adapt technology to the business requirement, and not the business to the technology!
All this is the context for X-OD, the on-demand platform by Exclusive Networks. X-OD is an ‘everything-as-a-service’ architecture that helps partners fast forward their evolution to the subscription economy simply, rapidly and at scale.
The three pillars of X-OD are:
- A platform that transforms your business from capex to on-demand subscriptions
- A fully digital customer experience across your value chain
- A rich source of data insights to optimise customer success
X-OD allows partners to provide flexible, on-demand consumption of technologies, be they hardware, licenses or professional services – all under a single subscription and single bundled SKU. The digital experience includes self-care quoting, online ordering, billing and payments, and can be white labeled to the partner’s brand.
X-OD is also an automated framework for customer success that provides intelligence insights into customer demand. This provides partners with a 365 day a year opportunity to add value through uniquely tailored offers, upsell new solutions and be truly indispensable.
Subscription selling is already here; vendors support it and customers want it. Partners have been the missing piece in the jigsaw, but not anymore. Through X-OD they have a great opportunity to develop closer customer relationships, exploit data in new ways to sell more, and increase value and margin around premium offerings.