How to Sell Hardware as a Service

I gave a talk at the recent SMB Nation show about delivering a complete solution with the new Windows Small Business Server Codename “Aurora” system combined with the new HP microservers to deliver a complete service. I recently got a great question from someone who was in the audience via an email.

“In the Aurora session, I loved the idea of us owning the box, using SPLA, etc and delivering it all as a service. I have no problems selling my company’s services in general (I have a sales background), but what I do have a problem with is delivering the compelling reason to go TaaS (technology as a service) or SaaS (software as a service). Recently I’ve received pushback from clients who have asked, “Why would I want to pay monthly for that when I can just buy it and be done with it?” I’m wondering if it is my message (most likely) or if these particular businesses (which are doing well financially) would rather just make the CapEx expense. In short I understand the benefits of it, but I must not be conveying it properly to clients as they don’t seem to go for it. To be clear I don’t lose a sale, but they’d rather buy outright then say pay $750/month for an Aurora box, software, & services. They’d ask me what it would cost if they bought outright and then go that direction.”

This is a great question, because it gets to the core of the discussion. Let’s focus on the main question “Why would I want to pay monthly for that when I can just buy it and be done with it?”

The answer, Mr. Customer, is that you can’t just pay for it monthly and be done with it. The difference between owning something and having something delivered as a service needs to be much richer than just a lease versus a buy. To really achieve “Technology as a Service”, a solution provider needs to force this from a discussion of a purchase or a rental into something that is not a comparison at all.

I’d advocate that the service must include more than just the box and software – it needs to have a rich set of services on top of it. Management, monitoring, offsite backup, hardware warranty, unit replacement, having a spare unit available; the list goes on and on. Many of these are services, and most required for the delivery and use of the unit.

The key to good managed services, and to delivering high value services, has always been to make it too difficult to compare the solutions. The intention of the “as-a-Service” model is not to make it easy to compare the two, but rather to make the service a complete package that the customer can’t get the components of separately.

Finally, price matters. You need to ensure that your bundle is cost effective for the customer. While you don’t want to go down the route of having the customer compare line by line, you need to ensure you’re on par. Too far off, and the customer notices.