Look again at the services compounding example. In this example you can assume the following over a five-year period:

• A $5 million run rate of hardware revenue
• A 75% attach rate
• A 80% renewal rate

If 10% of all services sales in this example are sold as multi-year agreements, services revenue can potentially be impacted by as much as 47% over the 5 year period, which has significant impact on the bottom line.

Another benefit to the customer is that if the price of service increases during the period of their multi-year agreement, the customer is protected from the price increase.

In addition, there are financing options available from Cisco Capital that can help the customer from a cash flow perspective, while also giving you and your organization another sales tool to close business. More information on Cisco Capital is available at http://www.cisco.com/en/US/ordering/
or6/order_finance_and_payments_
concept_home.html