In the channel, mutuality has the power to transform the fortunes of partnered businesses.
Whether it’s a technological step-change, an innovative new product, or a reinvented route to market, the channel always seems to pull off its favourite trick of delivering marginal gain for everyone.
The latest rabbit out of the hat?
Leased hosted telephony.
For the reseller it’s an opportunity to turbocharge (and lock in) long-term profit.
For the end user, it’s an opportunity to better-leverage cash flow AND benefit big from bottom line-boosting tax efficiencies.
Oh, and for the vendor, it’s an opportunity to put together a proposition so compelling that it almost sells itself.
For the reseller, it works like this: purchase a lifetime SaaS licence from a provider interest-free over, say, 36 months; then lease it via a bespoke white label leasing agreement to your end user customer as part of your wider managed service offering.
Once you’ve washed out your initial purchase cost, you’re into solid and predictable profit each month forever going forward, that can be reinvested in delivering innovative products to your customers.
Plus, as the licence is transferable, you get to re-sell it elsewhere if the customer fails to renew or, worse still, goes out of business.
For the end user customer, it’s just as appealing – just for different reasons.
For them, leasing helps with cashflow and provides a secure-yet-simultaneously-flexible alternative to outright licence ownership; plus they get to write off the whole investment AND off-set all of the monthly lease payments against their corporation tax bill.
Post-pandemic – with many organisations large and small needing to tweak their communications functionality whilst at the same feeling nervous about large-scale capital expenditure – it’s a classic example of the channel stepping up to the plate.
“There has never been a better time to be in the market and leasing represents a brilliant way of maximising the opportunities that exist,” says Paul Gibbs, Sales Director at UK-based hosted telephony provider MyPhones, which is investing heavily in a pioneering new scheme that is as innovative as it is appealing.
It is offering leased lifetime licences to all aspects of its feature-rich hosted telephony platform on three-year interest-free terms, with the first payment deferred for a month.
It has partnered with UK-based B2B financing experts Tower Leasing to include the provision of easy-to-process white labelled customer leasing agreements, simplifying paperwork for resellers and end customers, eliminating the need for separate lease documents.
And later this month MyPhones will begin offering new resellers a free ‘Business Start Up Fund’ of £20,000 worth of leasable lifetime licences.
“For resellers, cash is king and we totally get that,” says Gibbs. “Leasing is the perfect way to generate regular and predictable cash flow whilst continuing to build OpEx revenue.
“Of course, we also recognise that significant capital investment in licenses represents a blocker for many resellers, which is why we offer easy interest-free terms.
“And the beauty of our arrangement with Tower Leasing is that resellers are able to contract with their customers via a white label agreement, rendering Tower invisible. The reseller bills its customer, collects the monthly lease payment, and then pays Tower”
“In terms of the licences themselves, we allow resellers to re-pool or re-sell if their customer either chooses not to renew a lease or if they cease to exist.
“Crucially, that means that once the initial purchase cost has been sunk, the leased licence generates highly-profitable, dependable revenue forever.”
For the end user organisation, the resulting tax breaks alone can often have a massively positive impact on profitability: a factor which makes for a potent dynamic to any reseller’s pre-sale conversation.
Tower Leasing CEO Kerry Howells said: “When leasing equipment, a company is able to gain 100 per cent tax relief on its rental payments against the annual corporation tax that it pays on profit.
“Businesses can obviously claim tax relief on capital purchases too but the tax relief applied to lease rentals is often more advantageous; which means that at the end of the financial year, businesses that are leasing give less to HMRC.
“We are delighted to be partnering with MyPhones to help SMEs take full advantage of those savings. Supporting UK small and medium-sized businesses is in our DNA so we really hope that resellers AND their customers see the value in our offer”
Additional and compelling non-financial reasons to lease also apply to end user organisations too.
The license – and therefore the MyPhones platform itself – is ‘ageless’ in the sense that any functionality updates (which are many and varied, and which occur often) are actioned automatically and at no extra cost.
“I like to think of licence leasing as classic channel,” says Gibbs. “The opportunity is everywhere for everyone and, when the execution is brilliant, all parties benefit from each other’s success.
“That’s genuine, beautiful mutuality.”
To learn more about MyPhones’ free £20k leased licence ‘Business Start Up Fund’ offer, visit their stand at https://technologylive.co.uk/ on September 28 or go to www.myphones.com
