[Video Transcript]
Under the TAMCO Technology-As-A-Service program, integrators are encouraged to bundle in their maintenance, support, and other services of value to the customer for the full subscription term in order to create a very comprehensive solution. However, most integrators are used to cash sales and it is rare for them to sell multiyear service agreements when a customer makes an upfront cash purchase. So integrators that are new to selling as-a-service solutions will often ask us “How are we paid for our bundled services?” in an as-a-service solution sale.
Let’s use a transaction example to explain exactly how integrators are paid for technology-as-a-service sales.
Assume an integrator sells a technology-as-a-service solution that includes a $50,000 technology system along with a $21,000 five-year maintenance and support contract. With the TAMCO Technology-As-A-Service program, the integrator will be able to sell the solution for a payment of about $1,400 per month and the money flow will look like the following:
- TAMCO will bill the customer $1,400 monthly which they will pay to TAMCO for the next 60 months.
- TAMCO will pay the integrator $50,000 once the installation is complete and accepted by the customer. So the integrator earns their full intended revenue and margin on the system, just as if it was a cash sale, and the integrator is able to pay their suppliers just as they normally would.
- In addition, as the customer makes their monthly payments, TAMCO will pull out $350 each month to pay to the integrator. This recurring revenue is generated from the $21,000 support services they bundled into the Technology As-A-Service solution sale. And this is how those services are paid to the integrator.
As TAMCO's integrator partners become familiar with these details, they are delighted to experience how the TAMCO Technology-As-A-Service program makes it so much easier to get customer commitment for their multiyear service agreements. Ultimately, integrators benefit from the usual upfront revenue, the addition of recurring revenue, and a more engaged, longer-term customer relationship.
