If Cloud vendors and their partners do not move quickly to an operational expenditure (opex) billing model, they will slow down the growth of Cloud opportunities and their ability to deliver Cloud services, according to Riverbed A/NZ channel director, Joe McPhillips.
McPhillips said the reason the industry is and must continue to see development around opex billing is due to the technology developments around Cloud and customer demands; “customers only want to pay for their usage, rather than a capital expenditure (capex) for services they may or may not utilise on a daily basis,” he said.
The bottom line is how end users want to purchase a solution or service.
“Traditionally, we have had a capex model where customers with a project or requirement in their business set aside capital expenditure for that,” McPhillips said. “They bought a solution that was hardware with software and some service, maintenance and support to go with that.”
The development around client-based solutions prompted a change.
Defining what matters
According to a statement from the infrastructure vendor, “Introducing a financing model, either branded or third party, means vendors and their channel partners can still receive the full payment from the finance company while the customer makes monthly payments to that same company.”
“This means customers gain the benefits of an opex pricing model while partners still reap the rewards of a capex payment.”
In addition to cost and a customer’s total cost of ownership (TCO) requirements, the primary consideration in adopting an OPEX model is whether a company wishes to own the asset. If the answer is no, there is no reason to make the purchase.
Considering methods of delivery and how services may be used is another significant element. McPhillips said providers must identify up-time and availability of the service.