The solution provider tells CPI it created a reseller-targeted service two weeks before the UK went into lockdown
K3 Business Technologies' managed services sales director has told CPI its remote desktop service, which it created two weeks before the UK went into lockdown on 23 March, has been "selling like hotcakes".
Stuart Buckley said the UK SonicWall partner created the service as a result of resellers approaching the MSP to pivot to a recurring revenue model, amid challenges in the hardware market due to COVID-19.
"Literally, we threw the product together, did some marketing, and it has just sold like hotcakes. So it's enabled people to work from home very quickly. And we're not taking anyone into long contracts on that; it's just monthly," he said.
"And we've had interest from some resellers... they may sell storage arrays, but they may not have the ability to install them, so the users have to install them themselves Then to support any servers or operating systems they don't have the ability to create a service like that themselves."
However, Buckley said that a key challenge that remains is customers requesting to defer payments.
"Our March sales were actually very strong. Now we are being asked by some of our larger customers to defer billing. So clearly they're struggling with cash flow and they're asking about where we can assist," he said.
"Fortunately, we are very strong because 80 per cent of our business, if not more, is recurring revenue. So what we can do is that rather than doing quarterly billing, we've agreed monthly billing for instance."
Indeed, Buckley said the pandemic has really highlighted the benefits of monthly billing for MSPs and their vendors.
Partners have told CPI previously that some security vendors have been reluctant to adapt to monthly billing models.
"As long as I get paid, I don't need to win any new business in the next three to four months to be able to survive this and still come out with healthy profits, thankfully."
However, despite K3's current resilience, Buckley conceded that its new business pipeline has narrowed significantly.
"What's happening at the moment, new business is really slowing down. So we are very much concentrating on contract renewals, and customer retention, which we always did anyway."
Like many businesses, K3 is anticipating further challenges to its balance sheet if the lockdown continues.
"We will see more customers start to struggle, and obviously debt on our ledges increase. But so far, we've only got one customer that's just saying we're not paying any bills right now. And that's because they're partly in the leisure industry, and they had to give everybody their money back.
"But fortunately we are able to support our customers at this time."