Teneo opts for in-house leasing

Carey: We have an asset we are under-utilising

Riverbed partner Teneo has become the latest VAR to embrace leasing, but has broken with convention by financing it all in-house.

The Reading-based reseller doubled revenues to £8m last year and is keen to make the most of its cash reserves, following the drop in interest rates.

Piers Carey, chief executive of Teneo, said: “Because the company has been successful we have built up a stockpile of cash. We have an asset we are under-utilising.”

Carey said offering leasing in-house would yield returns of nine to 10 per cent and would also give Teneo greater control than if it were provided by a third party.

Teneo became Riverbed’s first UK partner in 2004 and still draws 60 per cent of sales from the vendor. The leasing packages are available to customers deploying WAN optimisation solutions utilising Riverbed Steelhead appliances.

“It is win-win because it allows customers to deploy technology they otherwise would not have been able to,” said Carey.

Carey revealed that Teneo had redirected a six-figure sum of cash into the programme but said the VAR may team up with a specialist leasing firm after its own funds dry up.

Nick Garlick, managing director of Riverbed partner Nebulas Solutions Group, said his firm had recently moved into leasing but had not considered going it alone.

“Having access to a specialist gives you more options,” he said.

Simon Aron, managing director of VAR Eurodata, said that Teneo’s strategy was probably driven by requests from one or two large customers.

“We had a couple of blue chip companies that wanted to spread the cost of using the equipment and we did it all ourselves. But we have never gone to market with it,” he said.