SYNNEX Corp. plans to lean on its subscription-based purchasing, mobile device activation, and subscription renewal programs this year to drive incremental growth in SMB revenue.
Company executives discussed those plans with ChannelPro this week at the spring 2019 meeting of the distributor’s Varnex partner community in Greenville, S.C. Device-as-a-service (DaaS) purchasing in particular was one of several high-potential offerings called out onstage at that conference yesterday by SYNNEX president of North America Technology Solutions Peter Larocque.
Indeed, end users are demanding subscription-based procurement options in steadily mounting numbers, according to Sandi Stambaugh, vice president of the VISUALSolv group and device mobility at SYNNEX. Like many significant trends in technology, she notes, interest in DaaS originated in the consumer space. “As consumers adopt it, they then expect to have it in the commercial space, and then they require it in that space,” Stambaugh continues. “That’s what we’re seeing with the subscription-based offering.”
To date, however, SMB partners haven’t yet embraced SYNNEX’s DaaS procurement program, which allows end users to pay for hardware through monthly payments, in large numbers, according to Vice President of Sales John Phillips. Phillips expects that to change in 2019, though, now that SYNNEX has lowered the minimum order size on DaaS transactions from $75,000 to just $5,000.
“We should start seeing some activity from device-as-a-service revenue,” he predicts. “We’ll definitely be really pushing that this year.”
Partner education will figure prominently in efforts to drive greater DaaS adoption, Stambaugh adds. Many resellers, she says, aren’t familiar with the ways DaaS procurement differs from traditional leasing programs.
“Customers have the ability to incorporate products they bought from SYNNEX, products they haven’t bought from SYNNEX, services they bought from SYNNEX, services they bought from other third parties, their own services,” Stambaugh notes. “They can pull all of that together in this offering to their customers at a monthly rate.” Both the partner and the manufacturers involved in the deal, however, collect their money in full upfront.
Partner education will play a key role this year as well in efforts to promote greater awareness of the mobile device activations referral program SYNNEX highlighted at last year’s spring Varnex meeting. Introduced in 2017, that offering pays commissions to resellers every time customers activate a smartphone, tablet, or Internet of Things device for network service with a mobile carrier. Even hardware not purchased through SYNNEX is eligible, and all resellers have to do to participate is complete an enrollment form, sign a sales agreement, and register deals involving mobile devices through a portal in the SYNNEX ECExpress ordering system.
SYNNEX doled out $20 million in exchange for 717,000 activations through the program in 2018. “It’s very profitable for the reseller, and it was profitable for us as well,” says Phillips, even though relatively few channel pros have taken advantage of the offering so far. “The small group of resellers that we do have using the mobility portal in my sales group right now has made a noticeable difference in my bottom line each month.”
Mobile activations have made a difference in profits for solution provider MNJ Technologies, of Buffalo Grove, Ill., too. “We make a lot of money in activation bonuses,” says Ben Niernberg, the company’s senior vice president of sales and services, adding that it’s easy money to boot. You literally just submit a serial number, he notes. “If it gets activated, you get paid. It could not be any simpler if you tried.”
According to Niernberg, the same is true of RENEWSolv, a SYNNEX offering that tracks expiration dates on warranties, service plans, and other subscriptions and then automates the renewal process. “That’s an easy stream of revenue and profit,” he says, noting that it regularly helps MNJ pocket money it might easily forget about otherwise.
Prodding partners to make greater use of RENEWSolv is a top priority for Phillips this year. “It’s very low-lying fruit,” Phillips states, that requires little effort by partners to collect.
SYNNEX generated record 31 percent growth in U.S. SMB revenue last year, thanks to big gains in cloud computing and security, along with audio-visual solutions.
