Your customers crave flexibility. Here’s how to deliver it.

Shant Soghomonian, General Manager Channel Sales ANZ at Dell EMC

From cloud services to ride-sharing and even recipe meal kit delivery services with the precise amount of ingredients for the dish, we’re now comfortable with the idea that you should only pay for what you need, when you need it. The IT industry and its customers have been quick to see the adopt this model and gain the benefits.

Consumption-based models eliminate steep upfront costs, long implementation periods, as well as scalability and in some instances deliver cost savings. However, the industry has experienced challenges on the migration path. Moving to flexible consumption means operational and process change this may require new role & responsibilities within the team, different skills, and process change required within an organisation. Some cloud storage and software-as-a-service investments failed to deliver expected cost savings as a result of the application replat forming requirements, as well as the scale up and scale down of instances as they were required.

As the industry matures in cloud and as-a-service offerings, the appetite for flexible consumption grows, especially because it can provide many organisations an affordable path to digital transformation. In fact, IDC says that 75 per cent of customers are already using flexible consumption models1.

By evolving the consumption model to deliver better flexibility, cost effectiveness and greater service, we are now entering the era of what IDC calls “Flexible Consumption 3.0”.

So, what is Flexible Consumption 3.0?

Flexible Consumption 3.0 provides both on and off-premises hybrid cloud from one provider, metered usage, an ability to flex up and down using a configuration of base and flex requirements and a subscription model with clear pricing.

Businesses often struggle to accurately predict their exact storage and data needs – especially as needs fluctuate, or in other instances, the business grows rapidly. Flexible Consumption 3.0 improves the ability to not only pay for what businesses need when they need it, but understand how much it’s going to cost.

Flexibility includes the pricing

In the old days, IT was viewed as a cost centre to be managed instead of a partner in achieving critical business outcomes. As this perception changes, finance needs to keep a pace. Matching payment with usage means businesses are better able to fund their technology investments and remove the financial barriers to digital transformation.

Flexible finance means that organisations can pick the best option for both their technology needs and the bottom line. Customers that know that they will have moments of peak demand, and how big that demand is likely to be, may prefer a pay-as-you-grow model, where they join a plan that offers both baseline and buffer capacity up front, but only pay for buffer capacity when needed.

For those with less certainty around future demands, Flex on Demand, offers them more flexibility and less of a long-term financial commitment. You can set a committed capacity that the company uses now and a buffer capacity to access when needed.  Usage is measured via automated tools, but importantly, it can be adjusted when additional storage is needed. It means that even if committed capacity is exceeded, cost only increases in direct relation to usage.

The money saved by businesses using metered capacity is significant, and it can be directly invested back into the business to build future growth.  It also means lower monthly payments, and a streamlined payment process. Your customers can significantly reduce the total cost of ownership for their technology and gain access to greater options for the future. With 79 per cent of customers indicating that financing influences their choice of partner, Flex on Demand will be an important tool for maximising your customer service.

Ongoing partner benefits

Consumptive offerings won’t just help your customers – it will also benefit you, our partners, by driving customer loyalty and service, and removing financial barriers for customers looking to invest in new solutions. With this option, you can help your customers innovate and transform, as well as improve available cash flow for the future.

As technology changes, it’s essential that our financial services change too. With flexibility and scalability at the core of Flex on Demand, we’re excited to bring new affordability and accessibility to our partners and your customers. To find out more visit the Dell Financial Services homepage.

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1IDC Survey of IT Trends and Consumption Models Customers, August, 2018.

About the Author: Shant Soghomonian