DIY "Hardware-as-a-Service" Like Chartec with TimePayment's Seth Thompson

If you're a CIO of a multi-location buseiness that needs to "rip & replace" your LAN (local area network) or WAN (wide area network) so you can 1) replace or augment an old MPLS network with a modern SD-WAN/VPN or 2) simply take advantage of new cloud applications you're going to need lots of cash to change out your hardware and cabling.

Seth Thompson, hard charging go-getter from TimePayment, discusses with Dan Baldwin how to get the project approved as an operational monthly expense similar to how Chartec does business.

Click the player below to listen via SoundCloud or download the MP3 here.

Need more info? Email [email protected]

TimePayment SuperPower Award Press Release

View interview transcript below.

Interview Transcript:

Speaker 1:                           00:00                     This call is being recorded. Hello, this is Dan Baldwin with channel And today we're speaking with Seth Thompson of a company called TimePayment. Seth, thanks for talking to us today.

Speaker 2:                           00:16                     Yeah, absolutely. I'm very excited to be on here. I know we had a great conversation here about a week back. So excited to share.

Speaker 1:                           00:23                     Great. Just for our audience of end users for multi location businesses looking for multi,ucarrier solutions. We met at at a big channel would call that a Channel Partners Evolution. It was a big a trade show for channel partners and the vendors that they do solutions with for their end users,uin Washington DC it was a great event and we're,uglad that I was able to run into Seth and I set this up because a, he did have a lot of great ideas about,uleasing solutions in the circuits,uInternet and [inaudible],umarket. So Seth, start out. Tell us a little bit about yourself. How long have you been with at time payment and how long is a time payment bound business?

Speaker 2:                           01:14                     Yeah. So so I've actually been with TimePayment for about nine months now. I just started in January of this year, 2019. Previous to that I was with another finance company called GreatAmerica Financial Services still working in the same market, the communications and IT industry. So TimePayment's actually been around for a little over 35 years and it's kind of mystifying, but they have never played in the communications and IT industry. So the way it worked out was, you know, when they brought me on, they said, hey Seth, you know, this market and this industry, you know, the finance and the leasing side, you want to come help us start a presence there. And that's kind of what I've been doing for the last nine months.

Speaker 1:                           01:57                     Great. And you've had some success with some channel partners. You mentioned a unified global solutions. Where are they out of?

Speaker 2:                           02:05                     Yeah. Yup. So Unified Global Solutions is a really great partner of ours that I was able to bring on. They're based out of Dallas, Texas, and that is Zach Meyer and and his crew down there. And they're growing very, very fast, which is a, a good thing for both of us.

Speaker 1:                           02:21                     Great. So for any of our business, end users are looking for a, an experience partner who's done deals with you. They can get ahold of Zach at unified global. So let's get back to what it is that we're actually doing. We talked at the show that a perfect opportunity is a, you know, mid size business maybe or you know, multiple locations and they want to take advantage of a, you know, circuit Internet, a managed services solution from a partner like a Zach at Unified Global. But it's like, yeah, we like need everything. We need that rip and replace. Maybe, maybe they've got a bunch of old firewalls and a bunch of old routers and everything needs to be upgraded. And that's kind of like the perfect opportunity for you. Go ahead and talk about some of, you know those opportunities that you've done.

Speaker 2:                           03:16                     Yeah. So when we think about that, right the ideal end user customer for us is going to be someone that it sees the value in technology. And you know, really needs a way to consistently upgrade that technology while still being conscious of their budget. And that's where a company like TimePayment comes in because the model that most of these folks that are using this type of solution are embracing is, hey, we know we need technology. It's a vital part of our business, but we also understand that it consistently needs upgraded, right? Technology is always changing. It reaches end-of-life very quickly and it's not cheap. So when we see folks come in and they say, have every three years or five years or you know, whatever that pre set term they have is, we know we're pretty much going to have to rip out our whole network, replace, ever replace our phone system, maybe some of our workstations, right? There's all these different things that plug in to the network that needs to be replaced on a regular basis. And those are the folks that we can help both and providing an easy path to continually upgrade that equipment and doing so in a way that is a little more friendly to their budget than just dropping 50 or a hundred or $200,000 every couple of years.

Speaker 1:                           04:32                     And I can speak to that. I've got a couple of clients where they might have multiple locations and most of the time and energy is on their headquarter like locations, but then they finally get around to their remote outlying locations and you know, they gotta start from start at dirt level where you're basically having to, you know, switch away from cat three, get up to cat five or cat six, then bring in firewalls, then bring in managed switches, you know, get all the VPN and bealand set up and then they can bring in that call center solution. Or they can bring in that, you know, video monitoring solution. So a, for the people listening to our call, they might, you might be saying, oh yeah, I totally need this call center solution, or I totally need this new unified communication boy phone system. But if your firewalls and your switches and your cabling isn't ready to accommodate that, then it's really a two step process.

Speaker 1:                           05:30                     Yes, you need the technology, but you also need the infrastructure and companies like Seth can go ahead and roll that in because what you'll find is you know, the RingCentral's the 8x8's, you know, all of the other carriers, you know, they'll be happy to bring this solution to you, but you have to have a solid network for it to a restaurant and they'll do a network and they say we and we need some new gear and time to call and set them a time payment. So let's talk a little bit about who is actually going to be signing paperwork. It's the customer's credit and the customer that signing up, but the channel partners and our, all the information park about the process of approval.

Speaker 2:                           06:19                     Yeah. And this is what we have this front end process in particular is one of the things that probably differentiates TimePayment from some of the other finance companies out there. So really from the end user customer, their interaction is going to be primarily with that channel partner, right? And so they'll be giving them the information that as far as the basic stuff, we need a legal name, address, phone number, and then obviously the information on the deal their time in business. So they're going to give that to the channel partner and the channel partner kind of drives the whole process, right? It's not something that just gets dumped off to me or another person here. Their interaction and their interface is still going to be with the channel partners, the channel partners going to enter it in through our online platform or portal that everything's run through the channel.

Speaker 2:                           07:06                     Partners are gonna be the one that creates documents. The channel partners gonna be the one that submits the documents. They really run the whole process and they also have transparency to the whole process. They can see what it is that we are reviewing a deal. They can see when we need additional information so they can go to the channel partner and ask that. And this is all happening. You know, without them ever having to reach out to us by that channel partner ever having to say, hey Seth, what do I need? Why is this held up now? They certainly can still do that. Obviously I'm, I'm a resource here, but for the most part they're self sufficient. So what that avoids is being on the timeline and relying on the finance company to do all of this themselves because we understand that you know, time is just so important, especially in the sales cycle, both as a buyer and the channel partner to you know, I don't know how many folks to say, oh, our networks wrecked. We got to upgrade it now, now, now we don't have time to wait weeks or even days, you know, to get all this done. We need it now. And that speed and that ease and the transparency that we're able to bring on the front end. And in particular is really, really helpful to both the end users and the channel partners.

Speaker 1:                           08:17                     Hmm. Well, it's interesting that you say that because what you're speaking to now is more process oriented. So when you talked about the perfect deal, you know, needing to, you know, replace a lot of gear. I think you're also talking about the perfect partner is maybe some sort of a managed services professional where they are really locked into an awesome application. Like, you know, they do the software for all the VetNet radio offices in Texas and three adjacent states. And so what they're doing is they're really getting into a process of contacting this vertical market and say, Hey, we've got a, we've got a way to just rip and replace and do super quick. And we've set up a deal with a time payment. And so the internal process of the channel partner that specialized in veterinarians or some other vertical, they just pound out the paperwork and the individual veterinarian or whatever isn't troubled with happening. I fill out at least in paperwork,

Speaker 2:                           09:19                     Very much so. Yeah. Because that, that paperwork, ultimately, it's still gonna land on a veterinarian's desk, but everything's going to be ready for them. It's gonna say, Hey, here's all your information, here's the terms you signed for. You'll review the terms and the veterinarian would sign it. You know, obviously that end user is the one that we do write the contract directly with. So they're the obligor or on the contract, but everything up to that point is really handled by the channel partner. It's nothing that they have to do.

Speaker 1:                           09:46                     [Inaudible]. And so the final note on this process, I think at the show you said on average 70% of all, everybody is generally approved. The first go around and, or you know, deals under 15,000 almost always approved. Something like that.

Speaker 2:                           10:03                     Yeah. So the, the way our process works right is we actually, you know, just like a lot of finance companies, we we obviously have our own credit underwriting process, but I would say when we're looking at folks and, and in the vertical that I'm working in particular in the these like medications and it space it's probably around that 70% mark of deals that are coming back approved. You know, and that could come back a couple ways, right? It can say, hey, you're, you're approved flat out just on the information we have. It might be hey, we need a personal guarantee. If it's a newer business or there's additional information we need to get that approval, but one way or another you know, typically there's a way we can work towards that and you know, that that leads to a higher win rate for both the partners and the end users that are able to then get approved as well.

Speaker 1:                           10:49                     Great. And let's talk a little bit about the details. You mentioned earlier that in today's equipment and or managed services market where equipment is required to make managed services work, generally this equipment has to be replaced every three years. And by that time, the solution provider, whether it's the MSP with a fancy a software or whatever they're re they're renewing or upgrading those licenses. So what's the, I think you said that three years is the average term length for these leases and it's a fair market value or $1 or 10% buyout. I mean those were the old ways of doing things. What, what are the current ways of you know, the actual lease terms and then the length of the agreement?

Speaker 2:                           11:42                     Yeah, so a, we still see some some dollar buyout and FMV contracts, right? That's still pretty normal. We also see some rental agreements that, you know, really the, the biggest difference in the sense that there's no ownership change at the end of term, right? Like there might be on a fair market value, a dollar buyout and that plays really well to some of the folks that are doing those consistent upgrades or they just don't have any interest in taking ownership of the equipment. They know they're going to be getting new stuff every three years. So when, when you talk about the terms there it seems to be that especially with the consistent upgrading of the software and you haven't replaced the gear and everything else every three years you know, the, the rental programs fit very, very well with some of the other as a service and subscription based programs because then every three years and the need to renew their licenses or replace a year, whatever else, it's pretty easy to just rip out the old stuff, put in the new stuff, signed a new contract.

Speaker 2:                           12:44                     We've got an established customer. As long as everybody's been paid and everybody's happy with everybody, it's a pretty seamless renewal process.

Speaker 1:                           12:52                     [Inaudible]. And one thing that we do, I don't think we talk about when we met in the show is of everything that ends up on the TimePayment paper, I mean they're, the customer's making a monthly payment to TimePayment, right? How much of that is equipment only and or also includes the software licenses and or the actual circuits [inaudible].

Speaker 2:                           13:21                     So most of it is actually a mix of equipment and some sort of software or soft costs, right? Because, and this is the difference that you'll find in a lease or finance company like TimePayment and a bank where a bank's going to want hard asset for just about every dollar they're seeing where a finance company like TimePayment, we've got a little bit more flexibility in how we look at the transactions, right? If if the economics make sense and the risk makes sense, we can usually try to find a way to make it work. So I know in my space in particular, there's a really good mix of hardware and software. You'll also get some you know, implementation costs and professional services that are typically paid up front bumbled into those transactions as well. Because looking at it from both the end user customer and the Channel Partners Perspective just makes it easier for everybody if they at least have the option to wrap everything in.

Speaker 2:                           14:13                     Because if you're having to tell someone, hey, we're going to give this to you on a monthly payment for $500 a month or $1,000 a month, but by the way, you've also got to pay this $10,000 for the implementation fees or whatever that dollar amount is. All of a sudden you're almost making two sales there, right? And the customer is starting to think, well, this is a lumpy process. It's not quite as easy as I would like where they might say, you know what, I don't want to do that, but if I just have to pay 1500 bucks a month, not cut a check right now, I'll start making payments in 30 days. That, that speeds everything up and it makes it easier for everybody. The customer gets what they need faster. They don't have to empty their bank account to get into it and the channel partner themselves, right? They get paid everything up front. They don't have to worry about getting paid from multiple sources or trying to chase multiple people down to get their dollars.

Speaker 1:                           15:00                     Great. And do you mention an important term that the end user customer needs to understand? And that's professional services, whereas you might be upgrading your network and or you might be bringing a new contact center solution. There's almost always going to be a opportunity where you bring in a new solution and it has to handshake with, you know, your existing, you know, databases or mainframe or whatever. And you have to have some middleware written. And I've seen this quite a bit where, Oh, you know, we, the middleware, the API APIs, you know, they almost always work, but someone has to do them. And then next thing you know, you're having to bring in another party, you know, to right that middleware and you know, 10,000 more dollars and everybody wants it. But this guy still has to be paid and you can roll those professional services into the lease is what I heard you say.

Speaker 2:                           15:53                     Yes. Yep. That's right. Yeah, and I mean the, the way we look at that too, right? We obviously have our guidelines that say, Hey we like to have it nice and balanced. They 50/50, 60/40, but if there are transactions that are more lopsided one way or another as long as we can get an understanding of what is happening, the transaction, like, hey, this was a really time intensive labor intensive install or there were a lot of professional services because you know, it took a lot of, a lot of work to make everything play well together. Right. Typically included. We can usually get okay with that. Right. And that comes back to looking at the transactions and truly having partnerships with the channel partners because that's going to be a win for that end user of the transaction as well. Right. Because we don't want it to be a situation where the end users sitting there confused because they don't know what's going on. They don't know why somethings can't be included. Why some things can't, why the contract reads a certain way. So a large part of what we're doing is helping educate those, those channel partners and really being a, a partner and a resource for them too, so that everything comes out as smoothly and provides a good buying process for the end user.

Speaker 1:                           17:07                     Great. Now let's go ahead and wrap up. A lot of people say, well yeah, it sounds great, but what are other sorts of applications or solutions that work similarly? And when I first met you, I immediately thought of a paytech had a way back in the day. It was called a equipment or service, where paytech would you sign up for, you know, our, you know, Internet, our long distance, whatever, and 10% of your bill, you know, we'll multiply that time just a number of months in your term and we'll cut you a check for that and you turn around and buy whatever gear that you want. And the other, a big solution out there that a lot of people are familiar with is Chartec. So why don't you spend a minute telling us how your solution is the similar or different from paytex old equivalent for service model and or Chartec model.

Speaker 2:                           17:59                     Yeah, no, I'm really glad you brought that up. And actually I'm, I'm a, I'm a little bit familiar with Chartec from my days at GreatAmerica as they, they did some work with Alex Rogers. Paytech that was a little before my time. I'll admit I'm, I'm a young buck, but it's funny because I heard the equipment for service term brought up multiple times when I was talking to other folks at the show last week. So no, it's a, it's a really good point actually when you think about the, the model itself, it probably is similar, at least from what you're telling me with the equipment for service, at least in, in how it is administered. Maybe not exactly how it's sold, but how it's administered, right. Where you're gonna pay a, essentially a monthly payment for you know, everything that is included in your solution and that is a subscription on services, but also the hardware and everything else.

Speaker 2:                           18:49                     Because the idea is, you're avoiding that upfront expenditure. Now it's very, very similar to what folks are probably learning at Chartec with Alex Rogers. Because you know, he, he built his business on running a Hardware-as-a-Service practice. And actually that's a lot of what I help folks sell is, hey, we work in to help you fund and facilitate a Hardware-as-a-Service solution. Because the difficulty is for those channel partners out there is they get in situations where they'll sell a Hardware-as-a-Service solution, but they're using their own money. And to the end user it looks and feels the same. But that can also change the experience because all the sudden these MSPs are communication providers out there. Find out well I can't sell this anymore end Users because I'm using all my cash doing it. So we provide a way to do that on a much more scalable level than just self funding it.

Speaker 2:                           19:44                     And really we, you know, when you think about it, to those MSPs [inaudible] [inaudible] providers, they're very good at the technology work that they do. They've got great sales teams. But where at TimePayment comes in is we are very, very good at obviously the financing piece, but even the recurring billing and the practices that go around that. So when you're thinking about having experts interact with your customers, having experts do you know, the billing and that monthly basically any of the monthly servicing or anything like that that are around the administration of the contract, we do very, very well there. And that's somewhere where I would say, hey, you know, you can have your admin team do that. But it's going to be a second hand job because they're doing all the things that they have to do already. And then this where if you're working with a TimePayment to help fund and facilitate that, you have a dedicated team of people that is going to be doing it for you. And that is all they do. So they are true professionals at it. So you know, to the end user, the experience that you get on the back end, right, maybe a little smoother. But especially to the channel partner out there as they're looking to continue to grow their Hardware-as-a-Service solution to get it out there and help as many end users as possible on this consumption type model. That's really somewhere where we can shine and help.

Speaker 1:                           21:05                     Great. This is a Dan Baldwin with channel and we've been speaking with Seth Thompson a TimePayment. So if you're a channel partner out there and you're looking to put together a unique solution for veterinarians or any vertical or you're just all of a sudden in a facing a volumes situation and a new hardware as a service type deal, something that looks like what Chartec has been doing in the past. Chartec c h a r t e c for those of you not familiar with Chartec or paytex old equipment for service, that efs model, give a Seth and a at time payment, a a call and a, we're willing to go ahead and not publish contact information. We'll just call an h a s hardware as a service h a [email protected] So if you send an inquiry to [email protected], we will afford your inquiry to Seth and a Zach Meyer. People like him at Unified Global who have a specific experience doing these sorts of solutions and you can put together your own solution. Working with TimePayment and Seth, Seth, we appreciate your time today. Anything else you want to share with the audience in closing?

Speaker 2:                           22:29                     No. you know, I really appreciate you having me on here. It was great. And with the, again and definitely looking forward to interacting with any of the folks that may have interest in the HaaS solution, either for themselves or to offer their customers.

Speaker 1:                           22:43                     Great.

Be the first to comment

Please check your e-mail for a link to activate your account.