01732 759725 36 DISTRIBUTION Prepay discounts and monthly payments – smart finance makes it happen for corporate software In my last piece, I noted the new announcements that market leading vendors were putting prices up for their corporate products – but are also now offering annual and multi-year discounts to the market. Well, further review of the corporate software market has revealed just how widespread the prepay discount practice is now becoming for subscription software1, whether we’re talking about ERP, CRM, transactional systems, manufacturing systems and various line-of-business applications2. Generally speaking, commentators predict that most key corporate applications will see “price rises of 2% to 10% every year3.” This presents resellers with a ‘double trouble’ situation. Your customers are being presented with increasing prices and pressure to commit precious up-front cash in order to obtain multi-year discounts. Clearly, you’d like to help customers access those discounts, which are pretty substantial. Different sources put the multi-year discount range between 4% and 20%4, depending on the software vendor. So it’s a dilemma, especially for resellers trying to close deals in a tough marketplace. What’s really needed is a way of offering customers those discounts without the up-front payment. Luckily, smart finance is providing a way of satisfying all parties, helping you – the reseller – keep the deals closing, helping software vendors improve their cash-flow, yet also helping your customers spread the cost of software licenses while at the same time getting discounts for commitment. It’s worth explaining how smart finance makes all this happen for resellers. Essentially, smart finance captures the discount, all the while converting the up-front cost to your customer into a periodic charge. Siemens Financial Services finances the total up-front cost of the multi-year licences to the reseller, then provides your end customer with a smart financing arrangement which spreads the cost as monthly payments across the license period. These financing arrangements also effectively capture today’s pricing for the full term of a multi-year software subscription. As the reseller, this means you can guarantee your end-customers the beneficial pricing deal even though the software vendor may increase their pricing in subsequent years. There’s no doubt that this kind of imaginative approach is valued by our reseller partners. This year’s scoring and commentary from resellers has once again emphasized the value that a flexible, specialist financing partner has delivered to our partners, supporting business continuity. Of course, there’s a lot more to an excellent service from an expert financing partner like Siemens. As we have said, smart financing fixes payments and terms – which reduces budget uncertainty for a reseller’s customers in the uncertainty of today’s recovering markets. Your customers may also wish to invest in a higher spec option because they can spread the payments over a period and not risk a cash flow bottleneck. As SFS takes on the credit risk, there are no worries about late payment for the reseller – in fact your full payout from SFS happens immediately once contracts are digitally signed. Digitalised smart financing from SFS has helped resellers adapt to remote and hybrid working, close deals remotely (including contracts) and ensure your solutions and competitive offering keeps pace with new customer expectations. So if you want to get creative with finance and boost your software sales – contact me today: www.linkedin.com/in/david-mccoubrie/ Subscription Software: Trends for 2022 We’ve reviewed the various predictions for corporate software trends in 20225– here are the most commonly highlighted themes • Subscription software applications are now coming out in tailored vertical industry versions, more precisely addressing specific industry needs and functionality • AI and centralised analytics is likely to increase the power of personalisation and automation, such as natural language processing in customer service, or rapid personalised responses in CRM • Cyber security developments based on machine learning are coming through which are likely to make companies much more confident about running many of their operations through the Cloud • Data volumes – whether in consumer or B2B businesses – continue to increase. Companies that can harness that data and deal with customers and markets more intelligently will gain competitive edge • New subscription software developments are emerging which offer tighter, more seamless integration with a wide variety of corporate applications. This will help streamline business productivity Contact us today: www.siemens.co.uk/technology-finance David McCoubrie gives his views on:
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