Customers are discovering new ways to consume technology. The demand for public and enterprise-level private cloud with flexible consumption model continues to grow. This shift in technology consumption manifests itself in everything from simple process changes to industry disrupting inventions.
IT Service Providers (ITSP) are at the tip of the spear of change. Initially, ITSPs took the form of managed service offerings and helped spread costs over time for end customers. This was the first step of moving from CAPEX – where you use your own cash – to OPEX – in the form of leases and loans. As competition intensified in the ITSP space, alongside cloud-based offerings and emergence of a flexible consumption model, the direction pivoted rapidly from traditional financing options to consumption-based offerings. As a result, end clients started requesting for offerings where they could pay basis usage of units that are being measured in a technology solution. Simply put, customers demanded value and, as a result, organizations created that value.
HCL’s U4X Offering
HCL and Cisco Capital swiftly embraced this shift and started collaborating on a joint offering. HCL rechristened its previous IUS (Infrastructure Utility Services) to U4X (Utility for Everything).
U4X is a hybrid infrastructure service that delivers on-premise IT with public cloud-like experience with the security of private cloud. It enables setting up data centers and private cloud infrastructure for end clients while allowing them to consume in the same way they would under a utility construct. It was important to address some of the oft-repeated concerns of end clients such as:
- Scaling environments up and down
- Reducing upfront investments and optimizing OPEX
- Doing away with lengthy provisioning of time and process for any buffer capacity
Cisco Capital‘s Open Pay
Cisco Capital responded by creating Open Pay, an innovative payment option that once again addressed the customer need for value and was in line with HCL’s strategy.
How U4X and Open Pay are working together
With Open Pay, HCL has the entire solution on ‘day one’ and Cisco Capital divides this solution into fixed and variable components, with the fixed portion payable by HCL. The variable portion is payable only if the usage is beyond the agreed fixed threshold, and is payable basis usage of each resource unit.
This offering helped HCL in the following ways:
- Gain flexibility of scaling up and down while ensuring there is no time lag for use of provisioned capacity
- Optimize cash flows
- Leverage solutions that are bespoke and not one size fits all
- Gain complete control of the environment that is as secure as a private cloud
- Achieve ease of transacting across several countries basis a global agreement
Reaping the Benefits
The joint efforts of HCL and Cisco Capital started yielding results in July 2017. These included:
- Five-year deal (50% fixed and 50% variable) with a leading Swedish manufacturer that wanted to combine digitization, innovation, and energy efficiency to create sustainable solutions for its customers. The deal was a full stack server solution combined with ACI data center network, security support, and implementation services
- Five-year deal (50% fixed and 50% variable) with one of the largest financial services companies in the UK covering UCS servers. HCL and Cisco Capital were able to solve lead time delays in new equipment supply and also supported new testing and development of data center infrastructure, thus enabling business continuity as well as bursts in business volumes
- HCL and Cisco Capital are now spreading their joint presence in the US with a win at one of the global manufacturers of chemical products with a five-year (50% fixed and 50% variable) structure covering UCS servers
These wins are a testimony to the synergy that both HCL and Cisco Capital are able to create while ensuring relevancy to customer requirements and changing industry dynamics. The U4X – Open Pay has clearly emerged as a winning team and the partnership between HCL and Cisco will lead to greater value creation and happier clients in the future.