David Frye, Principal at Levantor Capital, and Peter Ward, CEO of Rootsquared, presented “Channel Cloud Challenges and New Financing Solutions” at the Global Technology Distribution Council’s annual EMEA Summit in Noordwijk, Netherlands.
The transition from traditional hardware and software sales to sales of IT as a service, such as cloud computing, has been a major topic for the past several years at the EMEA Summit, the leading gathering in EMEA of vendors and distributors in the information technology sector.
In the presentation, Ward discussed the challenges this transition poses to the IT industry, particularly related to the shift in payment terms from upfront to monthly over time. Ward also highlighted the opportunities for the channel as cloud adoption by the SME sector increases significantly. Rootsquared’s research concluded that to offer IT as a service successfully, the channel needs a simple proposition for SMEs that offers consolidated billing, bundling multiple IT-as-a-service components, including hardware, cloud and managed services. To do so requires new types of channel finance to cover payment term mismatches and manage customer credit risk.