See how Dell builds recurring revenue by pairing enterprise relationships with a broad infrastructure portfolio—packaged as services, subscriptions, and lifecycle support.
Turning hardware into services is a business model shift: instead of selling a server, storage array, or networking gear as a one-time transaction, the provider sells usable capacity and outcomes over time. The customer is buying what the infrastructure enables—performance, availability, compliance, and faster delivery—not a specific bill of materials.
In a traditional purchase, the buyer pays upfront, owns the asset, and takes on much of the operational burden: sizing, procurement cycles, upgrades, and often complex support contracts.
In a service-led model, the buyer pays for consumption—often monthly or quarterly—based on committed capacity, actual usage, or a blend of both. The emphasis shifts to a simple question: “Do we have the capacity we need, when we need it, and is it being operated to agreed standards?”
For the vendor, recurring revenue creates predictable cash flow, steadier forecasting, and a longer customer lifetime because the relationship becomes ongoing rather than episodic.
For customers, the appeal is mostly practical: fewer surprise refresh projects, smoother budgeting, and a clearer path to scale up or down as demand changes. Just as importantly, incentives align—if service quality drops, the relationship is immediately at risk.
Buyers typically notice three changes:
The important point: the hardware still exists, and it may still sit in your data center. The difference is how it’s packaged, paid for, and managed.
This is not a product-by-product review. The goal is to explain how a company like Dell Technologies can use enterprise relationships, a broad infrastructure portfolio, and consumption programs (for example, APEX-style offerings) to turn physical infrastructure into predictable, recurring revenue—through packaging, delivery, and go-to-market execution rather than technical specifications.
Dell Technologies’ shift from selling boxes to selling outcomes works best where trust already exists: inside large enterprises with long planning cycles, strict procurement rules, and low tolerance for downtime.
Enterprises rarely “start from zero.” They have years of servers, storage, endpoints, and networking deployed, along with established support contracts and operational habits. That installed base is more than revenue history—it’s a map of what needs to be renewed, expanded, modernized, or protected.
When a vendor already understands the environment, it’s easier to propose a consumption-based alternative (for example, an IT subscription model) because the customer can compare it against real utilization, real incident history, and real refresh timelines. This creates repeatable opportunities: expansions, capacity adjustments, and service attach that feel like incremental decisions rather than risky reinventions.
Big organizations optimize for risk reduction. They prefer vendors who can:
This bias toward “proven” partners matters for infrastructure as a service because the customer is effectively outsourcing part of the operational risk. A trusted vendor is more likely to be approved for multi-year commitments and recurring spend.
Services aren’t delivered by product sheets; they’re delivered through coordinated teams. Account teams translate business priorities into commercial terms, solution architects design what will actually work in production, and executive sponsorship helps unblock governance, security reviews, and cross-team alignment.
Over time, these roles become a kind of “relationship infrastructure” that makes recurring revenue possible: renewals move faster, expansions face fewer surprises, and new offers like APEX consumption models can be introduced with less friction.
Most enterprise decisions cluster around a few themes: reducing risk, standardizing platforms, simplifying procurement, and keeping costs predictable. Vendors that can speak to those priorities consistently—without forcing customers to re-learn how to buy—are the ones most likely to turn infrastructure purchases into durable, service-led relationships.
Dell Technologies’ advantage in shifting from “sell a box once” to ongoing services is that it can cover more of what enterprises actually run—end to end, from the data center to the edge. When a vendor supports a larger slice of the stack, it has more natural opportunities to attach subscription, support, and managed outcomes.
A broad portfolio typically spans:
This breadth matters because service-led models work best when they match how buyers purchase: not as isolated products, but as a system that needs to be deployed, supported, secured, and refreshed.
When one provider covers more categories, customers can consolidate vendors and standardize operations. That makes it easier to sell (and renew) recurring offers like consumption-based infrastructure, managed services, and lifecycle support.
Bundling can deliver real benefits:
The commercial impact is straightforward: broader coverage increases attach rates (support, protection, management) and expands the recurring portion of spend.
A broad portfolio can also be a trap if it encourages overselling or forcing every customer into the same bundle. The practical approach is modular packaging: start with what the customer needs now (for example, storage plus data protection), then add adjacent services (managed operations, lifecycle refresh, consumption terms) as adoption grows.
The goal isn’t to make everything uniform—it’s to make expansion and renewal easier without locking buyers into unnecessary complexity.
Consumption models let an enterprise get infrastructure capacity without buying everything upfront. In plain terms, you pay for the capacity you reserve (and sometimes what you actually use), and the supplier delivers, operates, and replenishes that capacity over time.
A perpetual purchase is the classic “buy the hardware” approach: a large one-time capital expense, then separate maintenance contracts and refresh projects later.
A subscription usually means a fixed monthly or annual fee for a defined bundle (for example, a certain amount of storage and support). It’s predictable, but can be less flexible if demand swings.
A usage-based agreement ties charges more directly to consumption. You might commit to a minimum baseline, then scale up (and sometimes down) within agreed rules. This is closer to paying for capacity as you grow, which naturally produces recurring revenue for the provider.
Most consumption contracts include a few building blocks:
Dell’s APEX-style approach is best understood as packaging: bundling infrastructure, software, and support into consumption-friendly offers with standardized ordering, deployment patterns, and billing structures. The key business effect is consistency—making it easier for customers to adopt recurring spend while still receiving on-premises or hybrid outcomes.
Managed services are the “operations layer” that sits on top of infrastructure—whether it’s purchased, leased, or delivered through an IT subscription model. In a service-led strategy, this is where a one-time deployment project can become an ongoing contract with predictable monthly spend and measurable outcomes.
A practical managed services wrap usually includes:
These layers matter because buyers don’t just want infrastructure as a service—they want fewer surprises at 2 a.m. and fewer fire drills during business hours.
Without an operations wrap, a refresh can look like: install, handoff, and goodbye. With managed services, the relationship shifts to continuous delivery: weekly reports, monthly service reviews, optimization recommendations, and renewal conversations tied to performance and availability.
This also creates natural attach points for broader offers—security hardening, backup, and capacity expansions—without turning each change into a new procurement event.
Most enterprises end up with a three-part model:
Before signing, insist on scope clarity: what’s included vs. optional, escalation paths (and response times), named reporting metrics, and how changes are priced. The goal is a contract that reduces operational burden—not one that creates new ambiguity.
Lifecycle services are where “hardware ownership” starts to feel like an ongoing relationship. Instead of treating support as a back-end necessity, it can be packaged as a predictable, renewable layer that protects uptime, simplifies planning, and keeps environments current.
Most organizations don’t want the same support for every workload. Clear warranty and premium support tiers let buyers align coverage with risk tolerance—standard coverage for non-critical systems, higher-touch options for revenue-impacting platforms, and add-ons for complex environments.
This creates recurring revenue because support is renewed, expanded, or upgraded as needs change. It also creates a natural starting point for deeper service adoption: once support expectations are consistently met, customers are more comfortable outsourcing more of the operational burden.
Proactive monitoring and predictive maintenance shift support from “call us when it breaks” to “we’re preventing issues before they become outages.” The value is easy to understand: fewer surprises, faster resolution, and less time spent triaging.
When buyers experience fewer disruptions and quicker outcomes, support stops being a line item and becomes part of how the IT team maintains credibility internally—making renewals far easier.
Refresh cycles are often painful because they combine budgeting, procurement, migration risk, and downtime concerns. Lifecycle planning turns that into a recurring engagement: capacity planning, roadmap alignment, and end-of-life management that keeps the environment compliant and supportable.
Strong lifecycle execution directly affects renewal likelihood and expansion. If the customer sees that support reduces friction and makes upgrades feel routine, they’re more likely to renew the service layer—and attach additional services—rather than reconsider the underlying platform.
For many buyers, infrastructure decisions are really risk decisions. Servers and storage may be the visible purchase, but what makes them “stickier” is the promise that data can be recovered—quickly, predictably, and safely—when something goes wrong.
When backup, replication, and cyber recovery are bundled into an ongoing service, the infrastructure is no longer just a box with a warranty. It becomes an operational outcome: meeting recovery targets, passing audits, and minimizing downtime. That outcome is difficult to swap out without revalidating policies, tooling, and procedures—so the relationship lasts longer and renewals become more natural.
Common service-led packaging patterns include:
These packages are typically positioned as a predictable monthly spend rather than a periodic project.
Protection and resilience sell best when anchored to business impact:
Start by defining RPO (how much data you can lose) and RTO (how long you can be down). Then map those targets to service tiers—daily backups for low criticality, near-continuous replication for mission-critical apps, and cyber recovery vault options for high ransomware exposure. The clearer the tiering, the easier it is to package, price, and renew.
Dell’s shift from selling boxes to delivering ongoing outcomes depends heavily on the partner channel. Enterprise infrastructure often lands in complex environments—multiple sites, strict security requirements, and limited internal bandwidth. Partners make service-led delivery practical at scale.
Different partner types solve different problems:
The result is broader coverage than a vendor-only model: local presence, faster deployment capacity, and vertical expertise (healthcare, manufacturing, public sector) that a general playbook can’t always provide.
The best executions look like a three-team relay: vendor specialists bring product and roadmap depth, the partner leads delivery and adoption, and customer success keeps outcomes on track over time. Clear ownership prevents handoff gaps, especially after the initial implementation when subscriptions live or die.
Before you commit, ask for proof in four areas:
If you want a structured way to compare partners, link these questions to your procurement checklist and success metrics (see /blog/how-to-measure-recurring-revenue-outcomes).
Enterprises rarely get to “choose one” environment. They run core systems on-prem, adopt public cloud for speed, and add edge locations for latency or local processing. The challenge isn’t access to options—it’s avoiding a fragmented operating model.
A well-designed infrastructure subscription can span on-prem and colocated sites while integrating with public cloud workflows. The goal is to keep procurement and capacity changes simple while still fitting into existing IT patterns—ticketing, change control, and security reviews.
Instead of forcing teams to learn different tools for each environment, the emphasis should be on consistent day‑2 operations: how systems are monitored, patched, backed up, and reported on.
Hybrid and multi-cloud strategies tend to break down when governance and cost controls differ by location. A subscription-led approach can standardize:
This is especially important in mixed estates that include VMware-based environments, Kubernetes platforms, major public clouds, and traditional workloads—without assuming a single vendor owns every layer.
Hybrid alignment becomes real when it supports practical outcomes:
The best multi-cloud experience feels boring in a good way: one set of policies, one operating rhythm, and clear costs—regardless of where the workload runs.
Recurring revenue isn’t just a packaging change; it changes how buyers justify infrastructure. Traditional purchases are CAPEX: a large upfront check, a heavier approval path, and a bet that demand won’t change. Consumption and subscription models shift more spend to OPEX: smaller, predictable payments that better match cash flow and reduce the risk of buying too much (or the wrong thing) too early.
For many enterprises, the real difference is speed and certainty. CAPEX often requires annual budget cycles and multiple sign-offs. OPEX can fit within operational budgets, which may unlock faster approvals—especially when commercial terms clearly define service levels, capacity ranges, and what happens when demand spikes.
Vendors typically grow recurring spend by lowering friction and making upgrades feel routine rather than disruptive:
These levers improve total economics not only by smoothing cost, but by reducing downtime risk and keeping performance closer to what the business actually needs.
Procurement teams often prefer models that reduce administrative overhead:
If you’re evaluating payment structures, billing frequency, or what to ask for in a quote, keep a running checklist and compare options against internal policy—then validate assumptions with finance. For a starting point, see /pricing.
Recurring revenue only works if you can see—early and clearly—whether customers are getting value and whether you’re earning it back through renewals and expansion. For service-led infrastructure (including APEX-style consumption), measurement should combine commercial metrics with customer health signals from operations.
Start with a small set of metrics that align finance, sales, and delivery:
A practical rule: if you can’t explain NRR changes in plain language (“three customers expanded capacity; one downgraded a service tier; one churned due to SLA gaps”), you need better reporting.
Commercial numbers lag reality. Add operational indicators that predict renewals:
Healthy accounts expand in simple patterns:
Watch for patterns that create avoidable churn:
When these appear, treat them like incidents: assign an owner, set a deadline, and confirm the fix in the next review cycle.
A common operational gap in hardware-to-services transformations isn’t the infrastructure—it’s the internal tooling needed to run subscriptions well (dashboards, provisioning requests, metering reports, customer portals, and lightweight approval workflows).
Platforms like Koder.ai can help teams prototype and ship these supporting apps faster using a chat-driven build flow—useful for internal delivery teams that need a React web portal, a Go/PostgreSQL backend, or even a Flutter mobile app for on-call workflows. Because Koder.ai supports deployment, hosting, custom domains, snapshots/rollback, and source code export, it can fit as a rapid “ops enablement” layer alongside existing enterprise systems, without requiring a full rebuild of legacy pipelines.
Service-led infrastructure can simplify buying and operations, but it also shifts what you’re optimizing for: predictability, shared accountability, and long-term relationship management. Before committing to a subscription or managed model, be explicit about the risks—and how you’ll manage them.
Vendor lock-in fears. When hardware, software, financing, and operations are bundled, switching can feel harder—even if the service performs well.
Cost creep. Consumption models can drift upward if usage grows quietly, if “included” services aren’t clearly defined, or if exceptions become the norm.
Service scope ambiguity. Misunderstandings often happen at the seams: who patches what, who owns incident response, and what “managed” really includes for hybrid environments.
The best mitigations are both contractual and operational.
Add exit clauses tied to clear triggers (end-of-term options, data return timelines, migration assistance, and any early termination fees). Require transparency in metering (how usage is measured, when it’s reported, and how disputes are handled). Then make governance real: schedule regular governance meetings with owners on both sides to review consumption, incidents, and upcoming changes.
If you want a deeper primer on how these models work in practice, see /blog/it-consumption-models-explained.
It’s a shift from selling equipment as a one-time transaction to selling usable capacity and outcomes over time.
Practically, you pay on a recurring basis (subscription or consumption), and the provider packages hardware plus operations (support, monitoring, refresh planning) so you buy results like uptime, performance, and predictable scaling—not a bill of materials.
Three changes typically show up quickly:
The hardware may still sit on-prem; what changes is how it’s packaged, paid for, and managed.
Enterprises reward vendors that reduce risk and friction.
A large installed base plus established account teams makes it easier to propose consumption models because:
A broad portfolio lets one provider cover more of what enterprises run (compute, storage, protection, networking, endpoints, edge).
That breadth enables:
The key is —start small, expand as needs prove out.
Common models differ mainly in how billing maps to demand:
If your demand is volatile, usage-based terms can reduce overbuying—provided metering and scaling rules are clear.
Look for these building blocks and confirm them in writing:
Ask for sample invoices and example “scale up” scenarios so Finance and IT can validate how billing behaves under load.
Managed services are the operations layer that turns a deployment into an ongoing commitment.
A practical wrap often includes:
This reduces 2 a.m. fire drills and creates a cadence (reports, reviews, optimization) that supports renewals and expansions.
Lifecycle services make upgrades and end-of-life planning routine rather than disruptive.
To make them work:
Strong lifecycle execution is a major driver of renewal confidence.
Because resilience becomes an ongoing outcome (meeting RPO/RTO, passing audits, restoring safely), not a one-off product.
Common service packaging includes:
Start by defining RPO/RTO per application, then map each tier to the appropriate protection service level.
Use a combined commercial + operational scorecard:
If you can’t explain month-to-month changes in plain language, improve reporting before renewal season. For more, see /blog/how-to-measure-recurring-revenue-outcomes.
