Finance, subscriptions, and unified comms
By tristan watkins, ceo, bnp paribas leasing solutions UK
With ownership comes responsibility – and for unified comms businesses which already have more of it than they want to deal with, discharging as much of this responsibility as possible should be an attractive proposition.
A Gartner report indicates that worldwide IT spending is expected to be flat throughout 2016; an earlier survey indicates that hardware spending is on a downswing. This doesn’t mean that companies won’t require unified comms services: it means that they don’t want to pay through the nose for the newest devices and applications. Instead of upgrading, they’ll wring the last drops of performance out of aging systems. Instead of scaling up, they’ll put expansion plans on hold.
Worst of all, these measures are often completely unnecessary. Firstly, because ownership is often an illusion: nobody reading this needs to be told that perpetual software licenses are not the same as full proprietary rights. Secondly, because subscription finance models make it entirely possible to make use of high-quality unified comms services – without straining your annual budget.
Small-to-medium sized businesses don’t tend to be cash rich, so if vital equipment meets a basic level of functionality, they often won’t replace it. For example, if they make a number of Voice over Internet Protocol (VoIP) calls on Mitel, they’ll seldom upgrade headsets until they absolutely have to: if there are high levels of static, poor sound quality, or any other issues, employees will have to make do with what they have. The upfront costs are simply too high.
A critical advantage of subscription-based models is that they significantly mitigate the level of upfront investment. Businesses recognise that a massive upfront spend on Mitel-compatible headsets is a temporary fix at best: in a few years there’ll be wear, damage, and they’ll have to reinvest all over again. When you can pay smaller amounts over a number of months, you can upgrade on a more consistent basis – and with far less financial risk. This model is also applicable to software: if you need the 2016 version of some business-critical accountancy applications, you can lease it safe in the knowledge that you’ll be able to regularly upgrade to the latest edition, often with minimal change to your regular payment. . Resellers who use this model are interested in striking long-term deals and forging long-term relationships: they don’t want to close a one-off transaction, they want an arrangement that encompasses support, upgrades, and eventual renewal. There is a clear incentive to come to a mutually beneficial arrangement.
Scalability and flexibility
Companies rarely turn out to be exactly what their owners expect. Sometimes they’re smaller, sometimes they’re bigger, sometimes they pivot and become something else entirely. When this change occurs, comms need invariably change too – in one direction or another. If you need cloud desktop virtualisation software, purchasing perpetual licenses outright can come back to bite you when you need to expand your business.
A key advantage of subscription and leasing models is that providers have every incentive to help you out in these situations. If you need to add a new user, it’s usually trivial to get them added to your plan – and the same applies if there are ten or twenty additional users.
Of course, routine upgrades and scalability are nice, but they’re long-term concerns. Unified comms services are comprised of many constituent parts, and if any one of them falters, it can be a problem. The IP phone systems might go down; your IM software might become afflicted by security issues – a number of things can happen, and when they do, they may well be beyond your in-house team to solve. Some of these problems can even predate integration into your systems: implementation can be a tricky business.
A chief advantage of subscription and leasing providers is that they will often integrate setup, support, and implementation costs into their solution for a nominal cost. If your business requires a comprehensive unified comms platform, this can give you much-needed peace of mind: no technical hiccups, no issues with integrating it into your existing setup, and no need to waste valuable resources on routine support.
Subscription models aren’t a good fit for every organisation, of course, and before agreeing to any contract, it’s worth having your accountant look over the particulars. However, whatever imperfections there are pale in comparison to the disadvantages of an inflexible, non-scalable, and expensive series of outright purchases.
When you can lease software and hardware, you can negate these disadvantages and prepare your business for its near and long-term future.