Enterprise software companies are facing an increasingly diverse information technology customer base, as some move to the cloud, while others prefer a hybrid or on-premise approach. In addition, some applications like disaster recovery require elements to reside on premise for maximum security and performance.
Software application providers face the unique challenge of balancing customer consumption preferences with technical requirements. In addition, software companies are under pressure to optimize their financial models and drive much higher margins and recurring revenue streams while achieving rapid global growth. Cloud-only consumption is great for margins, but has limits:
- Some data-intensive workloads can be incredibly expensive and less financially viable to run in the cloud vs. at the edge
- Ultrasensitive data and mission-critical network applications require on-premise computing
- Customers may lack the resources for support
Challenge: profitable global growth
A prominent U.S.-based software company producing secure storage, data delivery and disaster recovery solutions was looking to grow globally while enhancing their customer service and operating with the margins of a software company. This is no small task, even for the largest enterprise application providers. This customer’s intellectual property (IP) is primarily in their software application; however, an element of on-premise hardware is necessary to manage the application and its exchanges with the cloud. It was critical that the hardware be optimized and locked down to properly execute the application. The software provider needed to have complete control over the hardware specification and configuration that is running their application. However, hardware was a drag on profit margins and while needed, had a negative financial impact to the customer’s bottom line.
Challenge accepted: Avnet Integrated Solutions
After narrowing the search, the software company chose one vertical partner with unmatched capabilities: Avnet Integrated Solutions.
Sourcing and integrating hardware weren’t the only needs of this customer. They needed a tech partner that could help enhance their financial metrics and provide cost-effective support for their end customers. On top of this, the capability had to be global to ensure the software company had the right partner for growth well into the future.
Solution
This software company didn’t want to deal with integrating, transacting or servicing the appliance solution due to the costs involved. Integrated Solutions was able to decouple the hardware transaction from that of the software. This allowed the software company to transact only their high-margin application, while leaving the lower-margin hardware transaction between Avnet and their customer.
The software company’s mission-critical application also required an ultra-responsive global service and support network that would be extremely expensive for the company to scale in-house. Avnet's global support network provides customer service call handling and support-ticket management. In addition, we provide advanced exchange services to swap out any field failures and keep the company’s customers happy. All of this frees the software company to focus less resources on support and more on the further development of their intellectual property.
Results: real success and growth
By uncoupling their software IP from hardware, the software company has experienced double-digit profit margin growth, nearing 20%. Thanks to Avnet’s global supply, delivery and support channels, the software company has been able to further expand its TAM outside of the U.S. and into EMEA (Europe, Middle East and Africa), including Australia and India.
You innovate, we'll integrate
From a complex challenge to a quality solution that scales with success and growth, Avnet Integrated Soliutions delivered a reliable, innovative hardware solution that improved the software company’s financial metrics and expanded their TAM internationally. Local integration, even on a global level, ensures positive user experience – and a leg up on the competition. By leveraging the unmatched global services and capabilities we’ve been providing since 1921, our customers can focus their energy where it matters most — their core software competencies.
To talk about how we give you back time and resources to focus on product innovation, contact us.
Business challenges
- Transacting hardware with an application: The need for appliance solutions can negatively affect margins
- Lacking plug-and-play solutions: Can slow sales cycle, limit market reach and damage customer satisfaction
- Providing financing: Financing the sale of hardware creates risks, and can negatively affect cash flow
- Promoting growth: Sustainable scale requires a global server and support network
Key solution capabilities
- Technical expertise: Global capability in delivering validated hardware, software and support for intellectual property
- Customized solutions: Validated SaaS and hardware options increase global TAM
- Shortened time to market: Offering complete, validated packaged options speeds time to market and time to value
A complete suite of solutions
- Hardware solutions: Our technical team can guide you from proof of concept (POC), final design, construction, testing, integration and packaging
- Data solutions: An invaluable online resource that’s a seamless digital portal where resellers, enterprises, and sales teams can configure, quote and purchase quality integrated solutions and support directly from Avnet
- Support solutions: Encompassing complete global support of the hardware including delivery, installation, migration, extended warranty and refurbishment
- Financial solutions: Avnet assumes all of the risks traditionally associated with financing appliance solutions, including securing and servicing the credit account. We can also assist with the transaction of the software application, removing your risk of non-payment.