'CFOs cautious over cash flows': Exclusive's sales director

British distributor launched a finance and leasing service this year to offer more flexibility around customer cash flow needs

Tech purchase decisions have been under close CFO scrutiny due to intensifying cash flow caution, with budget availability no longer the only gating factor according to Exclusive Networks sales director, Adam Williamson.

In an interview with CRN, Williamson explains that, as also noted by Palo Alto CEO Nikesh Arora, CFOs now get heavily involved at purchase decisions due to cash flow caution.

"Rather than just asking if there is budget, it's now about available cash," he argues.

"Since most channel projects burn cash without generating revenue, CFOs are carefully controlling outflows to preserve strong cash positions.

"They may approve a multi-year deal but only release payments annually or quarterly. This isn't new - financing and leasing has existed for some time. But interest rates have become prohibitive."

Williamson tells us how these challenges have led the way for the introduction of a new Exclusive Networks' finance and leasing service to offer "more flexibility to tailor arrangements around customer cash flow needs, breaking deals into more manageable payment structures.

"This helps navigate uncertainty without high-interest financial leases that sit harshly on balance sheets."

The service was soft-launched in July 2023 and then accelerated the go-to-market in September.

"I don't want to overstate it, but this programme has been a real game-changer for enabling partners and vendors to revive deals. We can put transactions back on the table that were either being reduced to 1-year terms or slipping to FY2024.

The payment flexibility ranges from "buy now, pay later" structures for FY2024 to more complex, milestone-based arrangements over 14 months or more.

"We can now accommodate payment terms from 90 days up to 5 years," he adds.

"This agility to tailor payment timelines has been critical. Partners and vendors faced losing business without more customer-friendly financing amidst the economic uncertainty.

"The Exclusive Networks' finance and leasing approach has prevented deals from falling apart due to budget constraints."

He explains that Exclusive isn't trying to claim that no one offers anything similar, but simply that its programme uniquely provides the payment flexibility partners and vendors need when companies are carefully managing IT spending.

"We can turn around solutions quickly - I pitched this concept to a customer one evening and landed a multi-million dollar deal now in our year-end pipeline.

"This transaction was previously slated as a standard 30-day purchase order. But the CFO indicated they wouldn't pay until full deployment despite approving the PO, significantly altering the partner's expectations.

"Fortuitously, we were ready to launch our financing and leasing service. While not 100%, the strong majority of partners embrace these customised options.

He explains the crucial role of not allowing deals to stall or vanish due to economic tensions.

"CFOs balance caution around cash positions with also protecting against other market volatility like interest and exchange rate shifts.

"No one wants to burn through cash reserves during uncertainty.

"So CFOs are laser focused on improving cash flow, not just saying ‘no' to needed technology investments. Our programme aligns their priorities."

A challenging year

Williamson explains how 2023 has been a challenging year.

"But despite these challenges, we have responded by helping partners and vendors navigate economic uncertainty."

He highlights a bright spot in the year has been the resilience our team has displayed.

"In difficult times like these, channel relationships and partnerships get tested and ultimately strengthened.

"Every department is supporting partners and vendors to exploit opportunities amidst the uncertainty, while also planning for future recovery.

"We don't want a pipeline gap when the market bounces back."

And looking back, he says that economic headwinds persist from the pandemic's lasting impact.

"And even before COVID, Brexit weakened the UK economy starting in 2016. The pound has struggled amidst various crises - departure from the EU, pandemic disruptions like supply chain snarls, the Ukraine war, and more.

He says that the IT industry has acutely felt these challenges.

"Longer term, we expect changes in how customers pay for and consume technology. Exclusive's finance and leasing service isn't a short-term band-aid just to weather immediate strains. But rather, it addresses a permanent shift mirroring consumption models like AWS subscriptions."

Organisations want more predictable, structured payments whether monthly, quarterly or annually, he argues.

"Some wonder if Capex is vanishing for pure Opex models, but that seems premature. The reality is cash will steadily flow out at a slower pace. Despite healthy reserves, prudent financial leadership means gradually releasing funds over time rather than massive upfront outlays.

"Our programme aligns to this new economic reality. Partners can rhythmically monetise customer assets without major lump sum cash flare ups or drain downs."

Integration to power rebound

Looking ahead, Williamson hopes to see a strong rebound in 2024.

"Encouragingly, end user interest already improved in Q4 as we build next year's pipeline. I expect more integrated technology projects moving forward. Customers want to extract maximal value from every solution."

He says that rather than siloed point products needing custom oversight, seamless integrations between platforms like Mimecast, SentinelOne, and others from the Exclusive portfolio allow smarter unified management.

"This also helps balance resourcing instead of fragmented tool-by-tool support."

What were once looser technology partnerships are now becoming tight-knit embedded ecosystems, he explains.

"This integration priority opens a big channel opportunity. Partners can make these connections happen for customers.

"Rather than just sharing vendor slideware, this year we focused on demonstrably showing interoperability between solutions."

He says that "seeing is believing" through proven integrated functionality versus just visionary pitches.

"Customers want tangible capabilities not roadmaps."