The rise of cloud computing and pay-as-you-go usage models are changing the way enterprises procure and pay for IT infrastructure. They are moving away from outright capital expenditures in favor of vendors that support OpEx or usage-based acquisition models.
OpEx purchases reduce upfront expenditures and allow companies to establish a recurring cost structure in accordance with net income. In a cloud-based data storage scenario, for example, the customer can buy monthly storage based on actual usage and scale up or down each month as needed—no guessing required.
Infrastructure Refresh with Limited Cash Outlay
A U.S. financial services provider was looking for an asset-light OpEx model as it planned a refresh of its mission-critical data storage infrastructure. The new environment needed to support advanced functionality, and the OpEx model would provide access to the new solution without requiring the company to purchase it upfront.
One channel partner of Hitachi Vantara was pursuing the refresh opportunity but found the OpEx requirements challenging. To limit its risk potential, the reseller didn’t want to own the IT assets provided to the financial services company and still needed to realize the sales revenue. The solution provider considered securing a third-party organization to handle the financing, but the customer was wary of maintaining contracts with multiple parties.
To offer a compelling proposal with OpEx financing, the reseller worked with Arrow Capital Solutions, the financing and leasing team of Arrow Electronics. Arrow developed a proposal that met the needs of the reseller and the requirements of the financial services company. Arrow agreed to maintain ownership of the infrastructure assets for the refresh, reducing the risk for the reseller. Through Arrow’s private label program, the contract for the infrastructure would feature only the reseller’s branding.
A Winning Financial Strategy
Throughout the contract negotiations, Arrow provided financing expertise. The reseller’s final proposal offered the customer a five-year OpEx solution that includes Hitachi Vantara storage, software and maintenance services. By working with Arrow, the reseller was able to bundle all products and services for the refresh into a single agreement, maintaining control over the transaction and simplifying contract management for the financial services customer.
With Arrow’s assistance, the reseller clinched the $6.7 million infrastructure refresh project with the financial services provider. The collaboration presents a winning strategy: the reseller earns the customer’s business, recognizes revenue, and limits its exposure to risks associated with owning assets. The private label program allows the customer to interact with a single vendor and avoids third-party financing agreements. With the Arrow framework already in place, the reseller is poised to earn repeat business as the customer expands in the future.
Read the customer story to get the details on the $6.7 million project.
Image Credit: Hitachi Vantara