Lease vs. Buy: Increasing Your Bottom Line with BDR Rental
Managed service providers (MSPs) have two choices when it comes to equipping clients with backup and disaster recovery (BDR) hardware: clients can buy it outright, or they can lease it from the MSP. Traditionally, the majority of MSPs have required clients to purchase their hardware, but leasing is actually a better business play. See how a switch in your service agreements can significantly impact your bottom line, give you more control, and provide better protection for both you and your clients.
Drive new client engagement
Anything MSPs can do to lessen the barriers of entry for new clients is positive. Upfront costs for BDR hardware is one of those unnecessary barriers you can eliminate with leasing options. Let’s say your onboarding fees equal about one month’s rental fees. If you have to include a BDR purchase on top of that, plus any additional hardware you might sell – i.e. firewalls, wireless access points, etc. – that initial cost alone can kill the conversation, and thus the sale.
When you lease your hardware, the total cost is baked-in to your monthly fees and that huge upfront cost is eliminated. If you force the purchase of BDR hardware, you’re putting a big cash hurdle between you and the client, definitely not what you want.
Gain control over hardware maintenance
Purchased hardware is out of your control once it’s sold. That means your clients are in charge of vital maintenance like upgrade and recycle terms. Unfortunately, clients often hold on to devices longer than they should, or opt-out of protecting their entire environment. These risky practices put them at risk for data loss and business interruption. Of course, you can still recommend maintenance as needed (and should), but you have no control over how and when that is completed.
Not only does this put your clients in danger, but it’s also a threat to your business, your relationship with your clients, and your reputation. If the hardware fails, regardless of your recommendations, clients are going to come to you for recovery. If recovery isn’t possible, you could lose the client.
Renting BDR hardware puts you back in the driver’s seat as the owner of that hardware. With control over upgrade and recycle terms, you can guarantee hardware performance, access it as needed and make the best decisions for the safety of your clients.
Establish your authority
Many MSPs are now offering business consulting services through a Virtual Chief Information Officer (vCIO). These services put your MSP at the table with C-suite leaders to understand your clients’ overall business strategy. Using that knowledge, a vCIO will recommend and advise on the technology that can help clients achieve those overarching goals.
Putting strategic business goals ahead of technology establishes your MSP as more than just an IT services provider. Instead, you become an influential voice who clients can trust now and in the future. This is especially important for small to medium-sized businesses (SMBs) who probably have a lean tech department, if one at all.
Lean into this position by educating clients on the benefits of leasing hardware of over owning. Give them confidence in the longevity and protection of their hardware by including analysis on an ongoing basis in the services agreement. Show them the risks they take with ownership and make sure they understand where liability lies in the event of a disaster.
Education is one of the best ways to make sure clients understand their level of protection. You’re not scaring them into things they don’t need. You’re presenting them with the best protection options available and the understanding necessary to choose.
Take advantage of the capital preservation opportunity
Obviously, you can see why renting is a better option than buying, but that doesn’t mean you have to buy all the hardware yourself. If you run your own rental program you will eat up capital and lines of credit quickly. As we all know, cash is king, so don’t blow it all on devices.
Instead, team up with someone like Axcient! We work with MSPs to make renting both affordable and lucrative. Let Axcient fund the purchase of these devices for your rental program and watch your margins grow.
About the Author:
Doug Pruitt // Sales Engineer, Axcient
As a Sales Engineer for Axcient, Doug Pruitt brings his channel experience and technical savvy to implement strategic BDR and backup solutions and educate MSPs on best industry practices. He’s a dad joke telling world traveler with an enthusiasm for all things tech. When he’s not helping future Axcient MSP partners, Doug loves traveling throughout the country with his wife, 3 kids and dogs in their 38 foot, luxury travel trailer.