Martin Ardern, ICT Sales Director at Shire Leasing, shares how innovative finance solutions empower MSPs and VARs to seize new opportunities.
In recent years, the IT infrastructure landscape has undergone a significant transformation, with UK businesses seeking more integrated solutions that blend hardware, infrastructure software, and services. Yet, for many small and medium-sized enterprises (SMEs), upfront costs remain a significant barrier to adoption and investment. Channel solutions and buying trends have evolved, but have channel providers evolved their sales processes to fully capitalise on the available opportunities?
How many solution sales are lost to budgets?
Research from The Federation of Small Businesses (FSB) cited that the average cost of introducing any type of innovation over a three-year period amounts to over £27,000 for a small firm, with 28% of businesses surveyed identifying affordability as a barrier to adopting new technologies. Hardware for businesses, even if it is just a couple of laptops, can come as a significant cost for small businesses.
Fortunately, there is a growing awareness that these can be financed (if required), although often this is left to the customer to arrange rather than offered directly.
The shift in IT buying
Gone are the days when IT sales focused solely on hardware. Today’s businesses demand comprehensive solutions that combine physical infrastructure with the software required to operate it effectively. For example, when you consider the potential cost of integrating ERP systems, specialised application software and licences to support even just those couple of laptops, the cost of a total managed solution can quickly surge and become a huge strain on a customer’s cash flow.
As UK businesses increasingly adopt software-heavy and as a service-based offerings, the demand for flexible financing options that cover both hardware and software has grown significantly. This is where Shire Leasing's Technology Finance division steps in, offering 'total finance' solutions that address the evolving needs of the market.
The cost challenge.
As of 2024, a Microsoft 365 Business Premium user license costs £21.72 per month or £217.20 annually - a saving of nearly 16% if paid upfront. Consider a business purchasing IT hardware alongside annual software licences for their employees. Paying monthly for the software might seem convenient, but it often costs more.
When there is a mix of hardware, software, on and off premise infrastructure and soft costs such as delivery, installation and training, customers are faced with an array of invoices and agreements when approaching their technology needs. This means MSPs and VARs offering cash-only solutions are likely missing out on those wider opportunities.
Evolved finance solutions
Asset finance is used as a hugely popular cash flow solution for thousands of UK businesses, a £39bn market, and in the 12 months to October 2024 £1.2bn was transacted for IT equipment finance (Finance and Leasing Association). But as IT buying trends shift, there has grown a new need for an evolved finance proposition that supports businesses to invest in IT equipment and hardware, but also the intangible innovations and associated costs that come with adopting the latest technologies.
Leasing enables VARs to offer customers a single finance agreement that bundles hardware and software. This allows customers to unlock upfront discounts (like the Microsoft 365 example) while still spreading costs across manageable monthly payments, in line with their hardware investments. For businesses, this means improved cash flow and cost efficiency; for VARs, it means increased order values, higher sales conversions and customer satisfaction.
Future-proofing sales strategies.
As IT sales continue to evolve, staying competitive means adapting to customer needs. We anticipate seeing more bundled solutions in the future, combining on-premises hardware, software licences, and delivered services into single, manageable monthly payments. This approach will be crucial for MSPs and VARs looking to stay competitive and capitalise on a larger market share.
