How do you increase the stability of your business model while maintaining predictability in your cash flow?
You build up your recurring or annuity revenue streams as rapidly as possible.
This can be done with your managed services and intellectual property or productized offerings, but those aren’t the only ways. Many partners who earn a significant portion of their revenue from project services are also migrating their project services offerings into annuity revenue streams.
To help address questions partners might have about making the transition, I interviewed two Microsoft partners, TwinEngines and SSB, who have successfully embraced this opportunity and driven strong business growth as a result.
Here’s what I learned:

Benefits of a recurring revenue model for your business

Microsoft partner TwinEngines, who helps manufacturers and product service companies improve their workflows, saw the results of making the move quickly.

In addition to increased revenue and customer retention, here are a few benefits of moving to a recurring revenue model:
  • Predictable cash flow and fewer issues with obtaining payment from customers
  • More efficient use of resources and elimination of need to track time and materials
  • Increased customer satisfaction
  • Increased valuation multiples for your business
  • Stronger customer relationships
Data management solutions provider and partner SSB has also seen revenue increases from moving to a recurring revenue model.
“Within our own organization, this new consulting model and results driven approach, has allowed SSB to grow our customer base and overall revenue by 50-100% annually for the last three years,” Andrew Brodie, CEO SSB, said.
And according to Kevin Seefried of TwinEngines, there’s even more to it than that.
“This change has also allowed us to have a greater focus on providing higher value to our customers. We have found that we earned a seat at the table with our customers which has allowed us to find more opportunities to add value,” he told me.

Benefits of a recurring revenue model for your customers

You may have already been wondering what your existing customers will think of you making the switch to the recurring revenue model, and you can rest assured that they will appreciate it as much as you will.
Brodie and SSB have found that the model offers a win-win solution for both the business, and customers.

Here are the benefits your customers will receive from being a part of your new business model:
  • More predictable billing
  • Resources are always accessible when needed
  • Tighter relationship with partner who better understands needs
  • Focus is always on the top priorities
  • Having a fixed fee each month saves time not having to deal with finding budget, opening multiple POs, getting approval for each project budget
The bottom line is this: In a cloud world, recurring revenue is king. The more revenue you can convert to an annuity model, the better off your business, and your customers’ businesses, will be!
I hope these insights have been helpful and welcome you to reach out with any questions. Feel free to reach out via email, Twitter, or LinkedIn.
Until next time,