Software as a Service: The Challenges for Vendors

Many IT vendors are transitioning to a Software as a Service (SaaS) model, but how can they ready themselves for the challenge?

Over the past five years, there has been a dramatic rise in independent software vendors (ISVs) changing their license model to SaaS. Despite the not insignificant financial considerations, which include large upfront costs, increased investment in security, additional billing overheads and a decline in service revenues, SaaS and cloud is anticipated to become the dominant delivery model for software consumers by 2018.

According to global market intelligence provider International Data Corporation (IDC), the market for cloud-based products and services will exceed £68 billion in the next two years, with 80% of the world’s organisations adopting a cloud-based model.

With this in mind, it’s important for software vendors to plan their transition to a SaaS model and resource accordingly to ensure that the move gives both themselves and their customers the maximum benefit.

The Benefits

For ISVs and resellers , finding a compelling way for their customers and prospects to switch to SaaS can be hugely beneficial. By successfully transitioning them to a cloud model the vendor or reseller is able to:

  • Reduce the development, maintenance and support overheads by ensuring customers are on the latest software version or at least the current version plus one
  • Retain customers for longer by taking greater control of their infrastructure
  • Differentiate themselves more by offering better reporting, service and management
  • Reduce staff costs in the form of costly consultancy resources
  • Capitalise on new opportunities as more people come to market for a new system as a result of cloud services being available
  • Convert a larger percentage of its revenues to recurring revenues making the business more predictable and in turn improving its overall valuation

Given the mass market acceleration of cloud-based products and services,ISVs should be looking to capitalise on the growing opportunity to  target new audiences and expand on their current customer base.

Businesses are finding that there is now a strong case against purchasing perpetual software licences up front and instead are looking to buy into more flexible payment terms. For the buyer, opting for a SaaS model can enable them to make much-needed IT investments without eating into their capital reserves and they get to pay for the software as they realise the return on their investment, not before.

The Challenges

As with all business change, transitioning to providing SaaS presents its own unique challenges. Below are some of the typical hurdles vendors face and how they can overcome common customer buying objections:

  • Giving the customer a chance to say no
    When you propose a potential upgrade solution to the customer the two most challenging outcomes are often that the customer decides to do nothing or that they decide to go to market and re-evaluate their solution from scratch. Some companies have chosen to reduce the fear of moving by offering an initial lift a shift option whereby the customer simply hosts the current solution in the cloud and pays for it over the course of the year.
  • Providing a different kind of service
    Traditional software projects were big, cumbersome and came with lots of service days in order to bespoke the system to the end customer’s every business need. This resource was highly specialised and as such could come at a premium. Service days were generally paid as delivered. As we move to more bespoke, hosted solutions the service element is often included so the provider needs to accurately cost the anticipated services when also factoring in the subscription fee.
  • Maintaining data security
    With increased responsibility comes increased risk, and this is a particular concern for buyers in relation to data. Vendors must ensure they gain the trust of their customers therefore demonstrating investment in security and the safe handling of data is key. Providing additional reassurances in the form of cyber insurance can be a key way to overcome security fears.
  • Mitigating the administrative burden
    By moving from an upfront or annual billing cycle to a monthly or quarterly regime, many IT providers put additional stress on their finance team. Models such as partnering with a third party finance provider who can provide customer billing and collection can be a cost effective alternative to outsourcing these roles or hiring additional staff.
  • Bridging the gap between outgoings and income                             The investment in software, hosting and service delivery all happens upfront before any service is delivered to the customer and they are due to pay. Companies that are used to receiving all of their payment upfront will find their cashflow strained by the shift to a cloud or SaaS model. Finance companies are able to help ease this burden by managing the extended payment terms on your behalf. This means you get paid up front while your customer pays the finance company, monthly, quarterly or annually, depending on the terms. In some cases the finance provider will also manage billings and collections services, leaving you free to focus on developing your next product, market or customer deal.

If you are an ISV considering making the move to a SaaS model, talk to us about how we can help.

Why is Syscap unique?

The combination of our breadth of offering, sector expertise and intimate knowledge of the professions and SME marketplace leave us ideally placed to support your IT business dreams. When other lenders deny finance, it’s usually because they don’t see the value in your assets and services, but at Syscap we understand these are integral business needs and are of as much value to customers as hardware.

With demand for hardware decreasing and these intangible services becoming ever more crucial, Syscap can provide the right business loans for your company.

Payment Over Time

Successfully overcoming customer objections and resolving them early on can set a great salesperson apart from an average one. Business finance can play a key role in helping IT vendors and resellers to overcome common objections during the sales process.

Customer objections can range from budget restrictions, not being able to justify the purchase and future growth plans all the way to costs being too high.

Syscap can enhance your business and transform your sales cycle by enabling you to:

  • Increase Qualified Leads Convert more leads faster and at a higher value and margin by taking the focus away from price during negotiations and turning it towards offsetting cost vs return on investment.
  • Gain New Customers With the cost of switching spread over time rather than paid up front the switching or upgrade of software and hardware becomes more palatable to the end user customer.
  • Close Deals More Quickly By removing the budget objection and providing same day quotes your sales staff are able to focus on closing business, in turn improving efficiency.
  • Provide Business Incentives By providing incentives such as mid term refreshes of technology with little or no increase in monthly costs, we help encourage your customers to stay on the latest versions of software which reduces your overall cost of supporting your customer base
  • Access Additional Benefits Syscap has a history of providing specialist, high-quality services for its IT partners that go above and beyond those of other finance lenders. This includes additional benefits such as tailored marketing support and collateral, access to its partner portal for 24x7x365 quoting, incentives for completed sales and a range of finance solutions and products that help your business grow.

Syscap Finance Options

As well as financing your customers we can also offer business specific finance for your own business including:

  • VAT funding
  • Tax funding
  • Asset purchase

Become a Partner Today

With over 25 years of experience in the tech finance sector and active relationships with over 350 partners you can be sure that your business is in safe hands with Syscap.

Join today and enhance your sales model by signing up to our Partner Programme.

What Role Can Finance Play In Reaching Your Strategic Aims?

Numbers are the linchpin of any business and serve as a barometer to help you measure your efficiency and progress. Often finance is perceived as a constraining factor and not as something that can be used creatively to drive commercial success.

At Syscap we’d like to encourage you to think of finance in a fresh way and see the role that it can play in helping you achieve your strategic aims.  Here are just some of the ways an innovative finance partner can take your technology business to the next level:

Acquisition – offering the funds to acquire other businesses either to extend market share or solution capability.

Establishment – providing the funds to acquire, move or refurbish premises, invest in or upgrade infrastructure and equipment, furnishing, vehicles and more. Competitive rates can also be provided on additional commercial finance products, such as insurance.

Rewarding and retaining staff – offering a compelling package of personal insurance products and fixed rate personal loans that can be offered to your staff as employee benefits. Similarly, providing the finance for Cycle to Work or home computer schemes.

Developing your value proposition – helping you differentiate your business with the provision of value added products and services to your customers, in addition to allowing them to pay for software, hardware, services and support over time, adding benefits such as discounted commercial  or cyber insurance.

Helping you overcome cash flow pinch points – by allowing you to spread bills monthly rather than pay them as large one offs. Examples could be settling significant outgoings such as VAT or tax bills or membership and programme fees, plus registering intellectual property.

Supporting business specific goals – such as upgrading customers, cross selling or moving customers to a SaaS model by offering payment over time and providing services such as monthly billing.

Syscap provides unique finance programmes focused on solving problems for IT and technology businesses. Often, vendors find themselves limited by financial constraints either caused by their own short term cash flow issues or their customers’ circumstances, which in turn impact on them closing deals.

But these aren’t the only challenges they face. Differentiating themselves in a busy market place and offering alternative deployment methods such as cloud are all very current issues that keep IT companies awake at night. By partnering with Syscap, technology firms have a single point of contact that allows them to overcome these challenges and face the future with scope to grow.

Syscap Executive – Top 50 Influential People in Asset Finance

1 July 2016 – Philip White, Managing Director of Syscap and Commercial Director of Wesleyan Bank, has been named in the Leasing Life ‘Power 50’, an annual list which acknowledges the top 50 most influential people in the asset finance industry across Europe.

The fourth edition of the Leasing Life Power 50 has received more input than any previous year, with nearly 1,100 people casting votes over a two week period. Voters were asked to nominate up to five people in the European leasing arena who they thought deserved to make the final shortlist.

This year’s ‘Power 50’ was dominated by senior figures working for lessors (31) with advisers from law firms, consultancies and accountancy firms making up the second largest category with ten people. The other nine entrants on the list consisted of brokers, trade association members and technology providers.

Philip White has been part of Syscap, the UK’s leading IT finance provider, for more than two decades progressing from Sales Director to Managing Director. More recently, he assumed a duel role as Commercial Director of Wesleyan Bank after Syscap was acquired by specialist mutual financial services provider Wesleyan in 2015.

White has played an instrumental role in overseeing the subsequent integration of Syscap as a subsidiary of Wesleyan Bank and has helped to spearhead a new strategic direction under two distinctive brands. From 1 April 2016, Syscap customers comprising professions, educational institutes and SME businesses transitioned to Wesleyan Bank with the Syscap brand being reserved exclusively for IT vendors, resellers and distributors. The combined division forms a formidable financial services business offering tailored and commercial banking solutions to over 22,500 customers.

The integration has already proven a success with the division achieving a 97% growth in commercial lending for January-May 2016 compared to the same year-on-year period in 2015. In addition, significant investment has been made in improving digital service capabilities, including Wesleyan Bank’s recently launched Tax Portal for customers who would prefer to transact their business online, along with Syscap’s upgraded Partner Portal which enables IT vendors and resellers to close more deals using the company’s payment over time option.

Philip White comments, “I’m proud to be recognised by the readers of Leasing Life and my fellow peers for the contributions I have made to the industry. To appear on the Power 50 alongside such highly esteemed figures is an achievement I would not have been able to make without having a hugely talented and hardworking team behind me.

“2016 has seen us make excellent strides in building a growing, successful and sustainable business which puts the long-term needs of our customers first. Wesleyan is also committed to drawing new talent into the financial services industry and we are investing heavily in our apprenticeship scheme to attract and nurture the future leasing talents of tomorrow.”

Syscap Launches IT Finance Portal For Partners

Syscap, the UK’s leading IT finance provider, has today launched its enhanced Partner Portal to assist vendors and resellers to close more deals using the company’s finance facilities as part of strengthening its partner incentive programme.

The online platform provides a fast and easy way for partners to obtain a quote for extended payment 24/7, 365 days a year to enable them to be more proactive in answering customer queries. Mobile responsiveness has also been improved to assist time-pressured sales people to obtain quotes on the move. By providing an instant online quote, the Syscap Partner Portal removes the administrative burden on vendor sales staff so they can accelerate their deal cycles and focus more on rewarding value-added tasks.

IT vendors and resellers can manage their own opportunities whilst having complete visibility of every one, from entry date through to current status and historical transactions.  All proposals in the Partner Portal are fully supported by Syscap’s dedicated partner account management team who are on hand to guide partners throughout every stage of the sales process.

The user-friendly platform’s latest version contains over 100 functionality improvements which have been developed in direct response to feedback from Syscap’s partners following a rigorous testing period.

These include the addition of new quick and full quote templates and advanced search capabilities to speed-up the quoting process, in addition to simplifying document uploads. The portal now provides comprehensive on screen tips and training videos alongside a breakdown of the different types of terms they can offer which are easy to understand, even to non finance sales people.

Philip White, Managing Director of Syscap, comments, “Syscap has a long history in helping its channel partners grow their business. This extends to allowing them to expand through investment in assets and new technologies, to funding short term troughs in cash flow which are common as they move to models such as SaaS.

“Our improved Partner Portal makes it effortless for our partners to introduce finance as an integral part of their sales process. The latest version includes some impressive new features and is part of our ongoing commitment to use appropriate technology to make doing business with us easy.”

The portal is one of a number of benefits that the company offers under the banner of the Syscap Partner Programme which includes comprehensive training, dedicated account management and a rewards and incentive scheme that awards points for every opportunity presented. With an added points incentive to support the launch of the new portal, Syscap is confident of attracting more channel partners to join its programme.

White adds, “The significant enhancements we have introduced to our Partner Programme are the culmination of intense dialogue with our staff and partner communities. Our close working relationship, coupled with our ability to support our partners as well as their end user customers, differentiates us from our competitors and cements our position as the leading IT channel finance specialist.”


Choosing The Right IT Finance Partner

There are several reasons why IT vendors should consider partnering with a business finance provider:

  • Increased sales volume at a higher margin
  • An accelerated sales cycle and improved customer retention levels
  • Potential to drive more revenue whilst maintaining within budgets

By overcoming common buying objections around cash flow and budgetary constraints, IT finance can give end users the flexibility to extend their access to capital by introducing payment over time options to fund major investment in new software or hardware. In turn this ensures your solutions and services are easier to buy whilst enabling your customers to remain competitive and maximise operational efficiency.

Business finance helps to attract and convert sales prospects who couldn’t otherwise afford your solutions by allowing them to spread the costs on a monthly basis, as opposed to having to commit to software licence and support fees up-front. This option is increasingly appealing to organisations who are looking to transition to the latest cloud technologies and motivated by the elasticity and time to market IT finance provides. There are obvious cost advantages to be gained too by moving from a traditional Capex to an Opex model through the ability to offset IT expenditure as an operating expense rather than an equipment asset, with reductions in tax further benefiting a business’s bottom line.

Increasingly more vendors are looking to include the cost of implementation in their finance offerings, whilst deferring the first payments until after the installation is complete. This makes the sale much more palatable when presenting to your customer and justifies the internal rate of return (IRR) when they are assessing the benefits of potential investments.

Despite the obvious benefits, there are a number of considerations IT vendors and resellers should make before deciding which partner is right for them to differentiate their sales model against their competitors. When it comes to business finance, one size certainly doesn’t fit all. At the outset it’s vital to determine what your primary objectives are before outsourcing to an IT finance programme.

Do you want to make your customers more ‘stickier’, as in the case of Autodesk who were able to move more customers onto multi-year renewals using Syscap Finance. Or, perhaps you’d like to increase your average order value and acquire more customers by positioning finance as a better way for them to pay? It’s important to choose a finance partner who not only understands your goals and is prepared to work closely with you to achieve them, but one that also has an implicit understanding of the IT industry with a demonstrable track record of working with leading software vendors.

Vendors should seek an IT finance partner who can offer tailored training programmes, managed by one dedicated point of contact, which are supported by specialist marketing collateral to help sales teams close more deals. Syscap can provide training, in regular modules, to bring all of your sales colleagues up to the same level of understanding. The training can also be delivered within a ‘workshop’ environment which is more interactive and typically yields excellent results.  At Syscap, we have run a number of successful rewards programmes with great prizes to acknowledge sales people for good performance. Furthermore, this helps to better engage and incentivise resellers to increase their conversion rates and margins.

Understandably, you want to choose a partner who is the right fit for your customers but in the long-term they must also be the right fit for you. After recently completing our integration into Wesleyan Bank, Syscap is now focused exclusively on the IT channel which means, more than ever, we are able to strengthen our support and service to IT vendors and resellers.

But what does this mean to you? Additional investment has been made to strengthen our partner portal to offer more relevant content, in addition to providing extended training and support services. We are also committed to helping our partners to grow by providing funding to finance investment in new technologies, such as data centres. In addition, we assist partners to increase margin on their deals by prime contracting customer contracts through purchasing the required partner services and software licences upfront in bulk.

Don’t let IT budgets stifle your business growth. If you want to successfully embed finance into your operational processes and remove potential barriers to sale, contact us for more information about how the Syscap Partner Programme can help.

Syscap Focuses Exclusively On IT Channel

Leading IT finance specialist strengthens support and coverage for IT vendors, resellers and distributors.

1 April 2016 – Syscap, the UK’s leading IT finance provider, today announces it has become a subsidiary of Wesleyan Bank. The completion of the integration forms a formidable commercial financial services business offering tailored banking solutions to over 22,500 customers under two distinctive brands.

Wesleyan Bank is a wholly owned subsidiary of Wesleyan Assurance which is part of the specialist financial mutual, Wesleyan Group. Following the Sycap acquisition by Wesleyan in February 2015, which was in part due to aspirations to grow long term lending book in the SME & IT asset spaces, this move demonstrated the combined desire to harness expert knowledge in the professions market to the fullest extent. Together the Bank and Syscap employ 120 staff from three UK office locations situated in Birmingham, New Malden and Northwich.

From 1 April 2016, existing Syscap customers comprising professions, education institutes and SME businesses will be directed towards the Wesleyan Bank brand while the Syscap brand will be reserved exclusively for IT channel activities to support its network of vendor partners and resellers.

Philip White, Managing Director of Syscap, comments, “Syscap has been at the forefront of the IT finance industry for over 25 years. More recently, we have seen a real shift from vendors simply thinking of finance as a way to overcome budget objections to using it to drive other buyer behaviour, from transitioning to SaaS models or encouraging customers to lock into longer term support and maintenance contracts.

“Wesleyan, with its ethical and customer centric approach, was a natural home for Syscap and has allowed us to significantly invest in people, processes and systems to benefit our partners and their customers to accelerate mutual growth.”

The successful integration has enabled Syscap to extend its comprehensive payment over time solutions to cover software, hardware, services, maintenance and support. It also provides funding to assist IT vendors to invest in new technologies, such as data centres, and increase margin on their deals by prime contracting customer contracts through purchasing the required partner services and licenses upfront in bulk.

Additional investment has been made to strengthen Syscap’s partner portal to offer more relevant sales and marketing content, in addition to providing extended training and support services to better assist IT vendors and resellers. To keep things simple, there will be no changes to existing payment agreements for customers of IT vendors and resellers who have live lease or loan products with Syscap, or through one of its funding partners.

White adds, “We are now able to offer more focused support to our partners from a larger software development team behind our vendor portal right through to credit, business administration and front line account management.

“This is enabling us to run more successful sales and marketing engagements which are helping IT vendors and resellers remove potential barriers to sale and close more deals.”

Looking for commercial insurance, funding or finance? Visit Wesleyan Commercial Finance.

Syscap Is Changing – Vendor Finance Focus

Syscap is a subsidiary of Wesleyan Bank

Syscap was acquired by the Wesleyan Group in February 2015 and is a subsidiary of Wesleyan Bank Ltd. Wesleyan is a natural home for Syscap, due to its focus on the professions market and aspirations to grow its long term lending. Being part of the Wesleyan has allowed us to invest in people, processes and systems as well as extending our product offering which now includes corporation & partner Tax, VAT funding, fee funding, WIP funding, insurance, as well as a range of personal finance products for business owners and professionals. We also offer comprehensive payment over time options to partners for their customers covering software, services, maintenance and support.

Behind the scenes we have been working hard to integrate our activities in an appropriate manner taking into consideration our customers, brands, distribution and account management support. From 1 April 2016 we have decided to reserve the Syscap brand exclusively for our channel activities and move our professions, education and SME business to the Wesleyan Bank brand.

What does this mean for me?

We are fit for growth. We have a bigger team supporting you from the software development team behind the vendor portal right through to credit, business administration and front line account management.

We are keeping it simple. If you or one of your customers already has a live lease or loan product with Syscap or one of our funding partners, there will be no change to this agreement or the way and frequency with which you make payments to us.

We have a dedicated channel just for you. Over the coming weeks our website and social media pages will become dedicated to our IT vendor partners only, giving you more relevant and focussed content and updates. Make sure you keep up with our latest news and announcements by following us on LinkedIn, Twitter and Facebook where we’d love to have your review.

If you’re in the medical, dental, legal and teaching professions, or are an SME, you will find all relevant content at

Why Syscap?

Syscap’s IT finance programme is the largest of its kind by membership in the UK and features 13 of the UK’s top software vendors and over 350 IT resellers as partners. Our clients include Sage, Autodesk, Infor, Concurrent Engineering and Advanced Business Solutions. With 25 years experience and a wide portfolio of products we can tailor an appropriate payment over time that benefits both you and your customers.

SMEs owed £225bn – Looking to IT And Asset Lending

More than half of SMEs are owed money, with a total of £225bn outstanding in late payments. As recent headlines about Tesco payment practices have brought this issue into focus, it is clear that many SMEs look to small business loans to assist cash flow.

According to a survey by Zurich of 600 SMEs reported by SME Insider, 67% of businesses report that late payment is the biggest cause for companies going into insolvency.

The amounts owed by creditors can be significant. Around one in five (20%) of the businesses surveyed said they were owed £25,000 or more, while one in ten said they were waiting for payments of over £100,000.

SME financing is a pressing problem for small businesses; 41% say late payments place significant pressure on their cash flow and 49% think the government is not doing enough to help.

Since the Tesco scandal, there have been gestures towards addressing the problem. A small business commissioner has been mooted, and from April large companies will be required to disclose details of their payment practices.

The Federation of Small Businesses is also promoting a voluntary Prompt Payment Code, which enforces a 30-day payment term as standard with a 60-day limit, but many firms will still rely on SME business loans to smooth their finances.

Jason Eatock, head of SME at Zurich, said: “We have been warned about a ‘cocktail of threats’ to the economy, and small businesses will need all the capital at their disposal to weather this potential storm.”

“In an uncertain economic climate, it is imperative that SMEs receive the support and guidance they need to adequately address the central concerns threatening the viability of their businesses.”

Does your company need SME funding? Why not talk to Syscap about how we can help support your business?

Eight simple marketing tactics you can do today!

Marketing is one of those disciplines that can be a bit daunting. There are mysterious processes, calculations and jargon that make you feel like a hopeless outsider. While it’s certainly true that qualifications and experience in marketing are valuable assets, there are also some simple steps you can take with no experience at all to boost the value of your brand.

Here are some ideas of how you can improve your marketing without investing in specialist resource.

1. Have a strategy
If you are doing any marketing activity at all, it is important to know what you are trying to accomplish: who you are trying to reach and what action you want them to take as a result. It’s too easy to see marketing as a tick-box activity which requires you to have adverts, social media presence or newsletters – these might be a waste of time if they do not suit your audience. For example, your strategy will be different if you’re a B2B organisation than if you sell directly to the public.

2. Know your value
Before you start reaching out to people, you need to know what you are going to say. For this, you need to know your unique selling proposition (USP); the thing that makes you different and preferable to your competitors. You might be the best value, the highest quality, offer the most comprehensive service or the best convenience – whatever it is, it should be centre stage in all your marketing communications.

3. Build an audience
Once you know who you want to reach and what you want to say to them, it’s time to work on building a mailing list – whether for email or direct mail, or in the form of Facebook likes and Twitter followers. The more loyal customers you are able to reach, the more likely it is that they will use your services or buy your products again. How to build up the list? Encourage email sign ups, do a guest column in a newspaper, comment on relevant articles; there are many methods, but they all take patient, diligent work. Don’t expect thousands of sign ups overnight, it takes time.

4. Use metrics
When it comes down to it, marketing is a numbers game. Some elements of activity are about developing relationships and strengthening brand values, but ultimately you want more visits, more clicks, more conversions and more money. This data should inform your activity and prevent you from wasting funds on activities that do not work. If you’re not collecting this data, start: tools like Google Analytics and Facebook Insights will help.

5. Develop quality content
Content is the stuff you use in marketing, whether it’s text, video, sound or imagery. It’s worth producing original content and spending time on getting it right. Use plain and simple language, keep it fairly short, and make sure it will be interesting to your audience. Use lots of images – although buying in stock photos should be a last resort, as they tend to look staged and artificial.

6. Social media
Commerce is increasingly linked to social media, whether it’s handling customer complaints, promoting new products or offers, or simply building relationships with customers. People will expect you to be on social media and reward you for maintaining an active and engaging presence. Post friendly, relevant content that is designed to appeal to your core audience.

7. Consider affiliate marketing
If you’re building up your business, it’s quite likely you know someone who is not a competitor but has a similar target market to yours. Affiliate marketing is a win-win arrangement where you share each other’s content in order to reach a wider audience. On social media, this can involve offering the chance to win a prize of the affiliate’s products if people sign up for your newsletter.

8. Learn about SEO
Search engine optimisation (SEO) is about making your site and content appeal to search engines as much as possible. Engines like Google use algorithms to rank sites according to a whole host of factors. The finer details of SEO are complex, but there are basic steps you can take yourself to boost your ratings. Take the time to find out about elements like keywords, page formatting and alt text for images so you can maximise your content’s SEO value.

These simple marketing tips will help your business grow. Even the simplest changes can bring results. If you’re considering an investment in marketing or any other service to help develop your company, why not talk to Syscap about your financial options?