Why Adopt A Hybrid Break-Fix-And-Recurring-Revenue Business Model?

By J K, Customer Engagement Manager, Vembu Technologies

IT businesses keep growing with technology and often change strategies to improve revenue and sustain themselves in the market. To attract customers and get a win over competitors, they keep experimenting with various revenue models. For instance, the IT service industry doesn’t provide only support services to customers but also offer a range of end-to-end IT solutions to expand their businesses. Another example is the combined “free and premium” model which brings in more customers by promoting free products and then leveraging that base to pay for the premium products.

Considering potential revenue streams for IT services providers, a hybrid model may be most suitable for their business growth and sustainability:

• Break-Fix Services. This is a traditional way of doing business where solutions providers wait for customer calls and then fix the issue. IT businesses that make revenue with this model bank purely on IT support, which offers little risk level to the company as they get paid for the completed work. They charge the customers based on the fix provided to them. This is not a scalable model since increasing the employees and infrastructure to gain more business is cost prohibitive. So most of the industry leaders have decided to transition to managed services where they can establish recurring revenue to sustain in the industry.

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