Commercial Integrator April 2021 - 12

AV AS A BUSINESS

Time Is Ripe for AV-as-a-Service
It's no longer about hemming and hawing around shifting away from product- and project-based
revenue to more of a recurring model. Now it's about your customers demanding it. by Tom LeBlanc
THE PANDEMIC HAS IMPACTED the
integration market in so many ways. One
way that can be spun as positive is that it
may push more customers toward investing
in as-a-service contracts. Cash is tight for
many customers, so they may prefer not to
pay cash or use their bank line and instead
choose a monthly investment.
Customers these days need " budget
linearity, " says Alan Rosenkoff, Director
of BD & Corporate Marketing for Corbett
Technology Solutions, Inc. (CTSI). " Often
when customers deploy new technology
their budget is lumpy. "
Every few years when they want to
launch a new project or update an existing
solution, they need to pay a large chunk of
money; pay for license upgrades; software updates; deal with out-of-warranty
equipment; and more. They might not have
budgeted for these variables.

been amplified during the pandemic.
" One of the biggest drivers of CTSI
Subscription Services has been accelerating
technology into a space so they get immediate use of it, " he adds. " We've seen customers say they can accelerate technology that
gives them real business outcomes such as
improved collaboration or security and doing
it while spending on a monthly subscription. "

Rethinking 'Technology Refresh'
Many integration customers would ideally
like to do a technology refresh every three
to five years based on the natural evolution
of needs and solutions. However, few would
call how the market changed since the pandemic a " natural evolution. " Customers realize they need to invest quickly in communication and security infrastructure to adapt their
spaces for a post-pandemic reality. However,
that doesn't mean they have the large outlay

Many customers anxious to adapt their technology in
a hurry will want to do business with an integrator that
offers some sort of recurring investment model.
Through CTSI Subscription Services,
which is a technology-as-a-service
program, " customers have a consistent
monthly expense associated with the
infrastructure, " Rosenkoff says. " They don't
have to worry about surprises. That budget
linearity, the consistency of the monthly
payment, and being able to budget for it
long term makes it easier. "
The technology refresh timeframe by
which as-a-service makes sense and benefits for the customer from a total cost of
ownership (TOC) standpoint is between 36
and 72 months. During that time, " they're
able to manage cash flow, conserve cash,
invest in infrastructure or resources that will
increase revenue versus technology that
rapidly depreciates, " Rosenkoff says.
It's not just about cash flow, however; it's
also about allowing customers to be nimble
and invest in technology that will make a
business impact quickly - a need that has
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of money needed for those investments.
It's logical that many customers anxious
to adapt their technology in a hurry will want
to do business with an integrator that offers
some sort of recurring investment model.
Communications Engineering Company
(CEC) is an example of a firm that recently
made an aggressive shift to managed services - and the timing was perfect with the
company earning an Excellence in Business
Award at last year's Business & Leadership
Conference, which concluded days before
COVID-19 restrictions swept across the U.S.
CEC's Managed Systems Program (MSP)
focuses on the customer experience.
Rolled out in early 2020 with a new sales
compensation plan to transition away from
project-based selling, it includes a built-in
refresh cycle so customers can stay current
with their technology.
The solution bundle includes a " whole
product solution, " said CEC CEO Kim Lehr-

man during BLC. " We provide an expectation of the lifetime use of the system, how
it will work with customer service, warranty
repair, hardware upgrades, software upgrades, cybersecurity, and more.
" The buying organization can make a
decision about how deep into that system
they want us to be. They can add any of the
menu items in terms of back-end service into
that three- or five-year contract, " she said.
Technology refresh is an option for more
customers if the integrator can provide
budget linearity, Rosenkoff says.
It's rare that a customer has budgeted for
a three-to-five-year technology refresh, let
alone a pandemic-accelerated technology
refresh. " That's where the subscription
really makes sense, " he says. " When we
have a conversation with a customer about
subscription term, we talk to them about
when they will want to refresh and we'll
align the term with the technology refresh.
" If it's 48 months, we might recommend
an initial subscription term of 48 months
and at month 49 we do a technology
refresh. That has been a really significant
benefit for customers, " says Rosenkoff.
The bottom line is that, since it makes
sense for so many customers during the
pandemic and beyond, it makes sense for
integration companies to put themselves in
a position to offer as-a-service or managed
services solutions that allow for monthly
versus capital investments.
Tom LeBlanc is Director of
Industry Outreach for NSCA.
Learn more about NSCA and
how to become an NSCA
member at NSCA.org.

Want More?
NSCA members can take advantage
of managed services sales training.
Visit NSCA.org and click on the
" Training " tab to learn about offerings
from Advisory Council member
Corporate Sales Coaches.

commercialintegrator.com

3/15/21 2:46 PM

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Commercial Integrator April 2021

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