Selling IT To Tomorrow’s Startup

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What’s the startup of the future going to look like in the post-recession economy? Some VARs think that more companies will be looking to what amounts to an infrastructure-as-a-service model.

Rather than pay for all the equipment as a capital expense, burning their scarce startup money, companies may instead choose to outsource all of that, turning it into an operating expense rather than a capital expense.

That customer trend can represent an opportunity for VARs that are willing to finance the equipment themselves and then sell the services to end customers.

“There’s no education curve,” says David Bennett, president of Connections for Business, in Hollywood, Fla. “I see very fast adoption. One of the things we’ve found is that the folks it appeals to are those who are startups or capital-starved.

“If you have $400,000 to start your company, how are you going to spend that?” he asks. “If you invest $100,000 in infrastructure, you just whacked 25 percent of your working capital.”

For example, one of Bennett’s customers is a drug treatment center in Palm Beach that started with eight users but now is up to 35 users. Bennett’s company owns every bit of that organization’s infrastructure.

“If any of that infrastructure were to die or have a problem, we would just swap it out,” he says.

Bennett likens the infrastructure-as-a-service choice to the choice between living in a single-family home or living in a condo or an apartment.

In an apartment, you pay rent and all the maintenance is taken care of for you, but you own nothing. Still, no worrying about the plumbing going bad, mowing the lawn or the roof leaking.

“An apartment is pure operating expense,” Bennett says.

And these days, when renting an apartment can often be more appealing than owning a house, the same applies to infrastructure.