Beyond the Code: Why a Product's Commercial Model is its Greatest Feature
At Selectec, we spend our days immersed in technology. Our role is a little unusual; we’re not only looking at the tech we use to run our own business, but, more importantly, identifying and shaping the software products we offer through our B2B distribution channels across the UK and Europe.
A common belief in our industry is that a truly great product sells itself. While elegant code and a slick UI are fantastic, experience has taught us that this is only half the story. The most successful technology is a perfect marriage of the product itself and its commercial offering.
And to be clear, when we say “commercial offering,” we’re not just talking about the price tag or whether it’s a perpetual license versus a subscription. It’s so much more than that.
What is the Commercial Model, Really?
The commercial model is the entire framework through which a customer acquires, pays for, and accounts for a piece of technology. It’s about how the product integrates not just with a company’s IT stack, but with its financial operations.
A truly sophisticated model must consider two critical factors:
- The Route to Market: How does the product reach the end customer? For a distribution business like ours, this means the model must work for us, our reseller partners, and the final client. If the model creates friction or complexity for the channel, the product will stall, no matter how brilliant it is.
- Business Accounting Trends: We’re witnessing a massive, sustained shift from Capital Expenditure (CapEx) to Operational Expenditure (OpEx). Businesses prefer predictable, monthly costs over huge, one-off capital outlays. A commercial model that aligns with this OpEx preference is inherently more attractive to a modern CFO than one that ignores it.
A Lesson from the Giants
This isn’t a new concept. Business history is filled with examples of companies whose success was cemented by their commercial model as much as their innovation.
- Xerox didn’t initially sell its groundbreaking 914 photocopier; the machine was too expensive and seen as unreliable. Instead, they leased it and charged per copy. This lowered the barrier to entry to almost zero and aligned the cost directly with the customer’s usage and value.
- IBM did something similar with its mainframe computers, leasing them to corporations that could never have afforded the astronomical purchase price. They sold computing as a service, long before the cloud.
- Salesforce pioneered the Software-as-a-Service (SaaS) model. They didn’t invent CRM, but they revolutionised its delivery, turning a massive software implementation project into a manageable, scalable operating expense.
In every case, the genius was in making powerful technology financially and operationally accessible. The commercial model wasn’t an afterthought; it was a core part of the product’s design.
The Selectec Advantage – Funding and Expertise
This is where we, as a distribution partner, add enormous value. At Selectec, we don’t just ship software licenses. We build commercial bridges. By working closely with funding institutions such as CF Corporate, we can ensure our partners have access to tools to create flexible financial solutions for their channel customers.
This means they can help turn a large, daunting capital investment into a simple, budget-friendly operational costs. This empowers our reseller partners to close larger, more strategic deals and helps end-customers acquire the technology they need to grow.
Furthermore, Selectec invest in educating our channel sales professionals in business funding. This is invaluable. It means our team can engage in higher-level strategic conversations with our reseller partners. Designing long-term commercial plans that align with a customer’s financial roadmap. They aren’t just selling software features; they are architecting business strategies. They can identify tactical opportunities, like using financing to help a client overcome a temporary budget freeze to solve an urgent business need. Or even opening the eyes of vertical market clients to potential methods to free up budgets in these financially constrained times.
Co-Creating Success with Our Vendors
Our unique position in the market—sitting between the software vendors and the sales channel—gives us a powerful perspective. We see what works, what doesn’t, and where the market is heading.
We leverage this insight to act as a true technology partner to our software vendors. We provide feedback early in the development cycle, helping them understand how commercial considerations can be woven into the fabric of the product itself. Should it be modular? Should usage be easy to meter? Can it be structured to facilitate a multi-year, OpEx-friendly deal?
By helping our vendors design products that are sympathetic to commercial realities from day one, we ensure new technologies are primed for market acceptance and success.
This collaborative approach ultimately benefits the end customer most. When funding is structured correctly, it allows a business to be more agile. It frees up capital, improves tax efficiency, and enables the rapid adoption of new, transformative technologies for maximum benefit. Just think of the current race to implement AI tools. Businesses that can adopt these tools through flexible, OpEx-based models will gain a competitive edge far more quickly than those stuck waiting for a huge capital budget approval.
In the end, the goal is simple: to ensure that the fantastic technology we represent is not just powerful in its function, but also brilliant in its acquisition. Because the right product with the wrong commercial model is a missed opportunity for everyone.
Learn more about all the tools and products Selectec has designed to help you grow your IT business by contacting the team.
