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The Next Big Thing in IT Procurement is Consumption Financing

The allure of the cloud has grabbed all of our attention.  The notion of tapping into unlimited compute resources and only pay as you use it.  What could be better?  Imagine if you could still retain your own private hardware but also pay as you use it…the best of both worlds, right?  Too good to be true?  Not at all, it is called consumption financing and it is an option right now!

In 2018 the IT market juggernaut will ship another 12 million servers worldwide. This will go on top of about 60 million other servers already in production. It might surprise you to learn that more than 60% of all this infrastructure will be spent supporting private cloud computing solutions and traditional single tenant architectures.

All this is happening while the world of IT procurement and delivery is being radically disrupted by companies like AWS and Microsoft. We live in a world where any company of any size can tap into massive pools of compute and storage and pay only when you use those resources, turning IT into the Utility envisioned by futurists like Nicholas Carr, who wrote about this emerging trend over 10 years ago.

Therein lies the ultimate disruption of cloud computing: Supply chain economics and the nature of how we buy and sell in this trillion dollar market.

At 6fusion, we’ve prided ourselves on creating the tools and technologies that help buyers make smarter decisions about what they buy, how much they buy, and from whom they buy it. In fact, over the past 18 months, 6fusion has helped quantify and align financial efficiency for hundreds of millions of dollars in proposed infrastructure builds.

That’s why we are proud to announce the next big thing in IT procurement: 6fusion has turned all of that rich information and intelligence into a new type of financial services contract.

We call it Consumption Financing.

Here’s how it works:

  1. 6fusion creates a composite IT financial baseline for your IT service or IT operation.
  2. We work with your team to produce an optimized BoM configuration that matches your true consumption profile.
  3. You take your proposed configurations from vendors and establish a target price per unit so they can sharpen their pencils.
  4. You decide which vendor you want to work with.
  5. Our downstream banking partner provides you with a Consumption Finance contract, allowing you to take possession of the infrastructure, install it wherever you choose, and pay for only what you consume on a monthly basis, just like a Utility.

There are no minimums. There is no term buy back clauses. There is no guessing. The entire operation is delivered by 6fusion’s SaaS platform, providing both you and your financial partner access to the billing data.

Analysts estimate that in just a short few years over 80% of all IT infrastructure will be consumed on ‘pay as you go’ models. 6fusion is leading the way!

(sources: IDC Server Tracker, IDC Futurescape 2015, ‘IT Doesn’t Matter’, HBR 2003)

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