The Business Benefits of Recurring Revenue Model

Cloud services and specifically Unified Communications as a Service (UCaaS) offer a number of advantages to Interconnects, Managed Service Providers (MSPs) and carriers. One of the biggest benefits is a recurring revenue model. 

While the recurring revenue model may be familiar to MSPs, other providers that have traditionally sold on-premises solutions will see a big difference in their business when they offer UCaaS. Hosted or cloud-based solutions offer the service provider the ability to bill for their services on a monthly basis and avoid a lumpy sales cycle where they have limited interaction with customers over a 3-5 year period.

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In other industries, the downside of a recurring revenue model is often said to be the cost of getting started and the challenge of building a base. In the case of UCaaS, the cost of getting started is minimal because SaaS platform providers like CoreDial through a mature and growing base of channel partners have an existing customer base that want and need cloud-based approach.

Adopting a recurring revenue for UCaaS has a number of advantages that Interconnects, MSPs and Carriers can benefit from. Here’s five ways UCaaS will help our partners create a robust and successful long-term business: 

Sustainable Cashflow

The continual injection of cash from a recurring revenue model insulates the business from changes in the market and reduces the risk of customer churn as they won’t account for large portions of revenue. It offers the business liquidity and in turn agility in terms of investing in the business.

Predictability

The recurring revenue model in UCaaS makes customer usage predictable month-on-month and allows the business to plan ahead. When the revenue is predictable it is easier to invest in business development and allocate resource to grow.

Resilience 

Through challenging economic times, a recurring revenue model will help partners to weather the storm with dependable income that is OPEX driven and CAPEX light. It will be easier for customers to commit to a monthly operational cost rather than a large resource-intensive investment.

Scalability

UCaaS offers customers the flexibility to scale up or down their services to meet the needs of their businesses. That allows the service provider to deliver more services and rapidly grow their relationship with customers.

Customer Relationships

The recurring revenue model allows for closer customer relationships and on-going relationship building. The sales team has an opportunity to shape a service over time that is tailor made to the needs of each customer.

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