MSPAlliance Launches Leasing Program for Managed Service Providers
The MSPAlliance, working with Varilease, has launched a leasing program for its managed service provider (MSP) membership. Here’s a bit more on the MSPAlliance’s leasing program, along with other MSP industry leasing options.
According to a July 14 press release:
“MSPAlliance, the International Association of Managed Service Providers, today announced the launch of a new Hardware as a Service/Leasing program for Managed Service Providers (MSPs). This program will be brokered by Varilease, a leading North American financier of equipment leasing. The MSPAlliance Managed Services Leasing Program™ will allow MSPs to deliver both hardware and services based solutions to their clients while keeping costs at a relatively static level. “
This is an interesting move by the MSPAlliance and Varilease. Early true believes in the MSPAlliance program include Waypoint Solutions Group, ranked No. 72 on our MSPmentor 100 list.
Dan Wilson, president of Waypoint and a member of MSPAlliance’s Board of Advisors, leveraged the alliance’s leasing program as part of a customer engagement requiring $70,000 worth of equipment, according to the MSPAlliance’s press release.
Only Game In Town?
It’s great to hear about new leasing approaches designed for MSPs. But on its leasing information site, The MSPAlliance says:
“This is the only leasing program specifically designed to serve the needs of Managed Service Providers and their customers”
I think some companies — particularly Ingram Micro and Tech Data — would debate MSPAlliance on that point.
Ingram Micro earlier introduced the industry’s first HaaS leasing program for MSPs, according to an Ingram spokeswoman. And Tech Data introduced an MSP Financing Program in May 2008 as part of its own VARChoice managed services strategy. You’ll find details and comments about the Ingram and Tech Data programs here.
There’s no doubt that this is not the only program designed for MSPs and their customers. My rotation program that only 20 independents (like me) can offer nationwide is another program and my MSPs I work with are very happy with it.
That being said, Varilease is a very good company with an excellent rep in the marketplace.
I just set up a program for a storage company to do storage as a service for them (some hardware, some software, some services) where they have the managed service piece for good clients and refer out to me directly the poor credits so I get to manage their credit risk for them. They love it and so do the clients. A real win/win/win. It’s like they hired me as a credit analyst without having to put me on the payroll.
Hi Stu: Thanks for your perspectives on Varilease and your own leasing options.
Question: What type of impact — if any — has the economy had on your leasing programs in recent months? Is credit getting tighter? Are you scrutinizing applications more closely? Any other economic-related trends with leasing you can share?
Good question, Joe. The conventional wisdom is that when things slow down in the economy that its good for us as businesses have less cash and when they have it, they are more careful how they use it and are likely to take advantage of OPM (other people’s money). However, things got so bad so fast that its hurt us too cause on the client end of things there’s so much fear to bring on any new expense, even for things they know they need.
Most of my 23 sources have gotten slightly tighter with credit requirements, not a tremendous amt but enough to be noticeable. What has really increased across the board is the due diligence. Everyone is checking and doublechecking everything as the fear of fraud in the industry is rampant as the funders believe that desperate times greatly increase the potential for fraudulent activity. Since I try to do as much DD as I can on my end, its mostly just an inconvenience for me but the standards for their DD are much higher than it used to be even for our application only deals.
It is good to see additional financing options become available to MSP’s. But MSP Alliance’s claim that this is the only financing program designed for MSP’s is, obviously, a stretch.
I think we already had the discussion on who was 1st, wasn’t it MSP On Demand? The MSP Alliance announcement is good news as it will reach 1000’s of MSPs through their member base. Once they are aware of this program I am sure they will shop around and find the others from Ingram, Tech Data, MSP On Demand, Southern Lending, CIT, etc…
Lane: Who’s on first, What’s on second… kidding aside, you’re right: It’s good to see customer choice and leasing competition in the MSP space. Ultimately, this will drive market growth.
Thanks to master leases and other flexible programs the MSP can get as involved as they want in their ‘…as a service program’. The one I just set up (mentioned above) was a good deal cause the B- and C credits they let me do separately as independent leases so they didn’t have to take that risk of non-payment on their hardware and software pieces. They can use the master to get ‘in the middle’ and sell it as a service with a nice upcharge for them allowing them to make $$ on our people’s money. A great deal for good credits and they can still work with the tough credits, they just get to pay us directly reducing the provider’s risk overall. I love all the facets of this deal.
Where I could use your guys’ help would be in being sure I’m articulating it correctly and showing the added value so I can really work the MSP market full force. Do you have any advice on that front? Any ideas welcome either here or at Stu@southernlendingsolutions.com. Thanks in advance.
As a matter of record, just so I can throw my 2 cents in… When I was a reseller company I was the first HaaS deal publicly written about by Smart Reseller Magazine in 2000, it was titled “Total Service is the Magic Touch” In 2006 – MSP On Demand was formed and was the first to offer reseller based HaaS financing, that included Quoting Tools, Private label doc’s, single contract for service and Hardware, etc. See CRN Cover Article….www.crn.com/managed-services/188701086
OK I will stop……. But Now that I have said it – it really does not matter.
What is nice about more players in the market space is that it proves HaaS does exist and is a very viable offering for Resellers. HaaS is however tricky because you really have to understand the Business Model, What the value is, the sales proposition and the delivery method.
The only problem with a few offerings is they think it’s just “Add a Lease to the deal” this is still a complicated process. HaaS is however – “Creative Financing” with a twist. The barriers of entry to fund a 5k deal or a 100k deal in the normal lease/finance model are too complicated to be very effective in today’s environment, especially when offering HaaS. Once you have finally closed the deal – most resellers will tell you that everything starts all over again to close the finance part. Most of our programs take the complexity out – Don’t get me wrong financing a deal is still painful at times but there are ways to do things to increase the overall flow that ultimately increases sales numbers and profits.
I am excited to see more players get in the market place. To answer the economy questions – Our resellers are having an easier time closing deals but it has a lot to do with the way we teach them to present, sale and close. If you just add leasing as an option after you have given them your cash price and MSP price – then you will face the same problems closing a sale as normal. Low margin – High interest lease…..
Thanks for listening to my 2 cents….
Ramsey
Ramsey: You’ll enjoy this. As a matter of record, I was editor of Smart Reseller magazine at the time. All the best,
-jp
Joe: Its amazing how we sometimes think how big the idustry is when in reality its like drinking water. We have probably already passed by each other in some way 2-3 times without ever knowing it. Hope you liked the drinking water analogy…..Ramsey