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The rise of Hardware-as-a-Service

January 24, 2022 | Shannon McWilliams

And how you can harness its power for your customers

The as-a-service model has become nothing short of ubiquitous. From software (SaaS) to platform (PaaS) to everything (XaaS) in between, today’s technology buyer wants to enjoy the benefits — financial efficiency, increased security, productivity and agility — of as-a-service in nearly every aspect of their business and recently that desire has spread to hardware, too.

Research shows that the global Hardware-as-a-Service (HaaS) market is expected to grow at a Compound Annual Growth Rate (CAGR) of more than 25% from 2021-2027, to exceed $300 billion by 2027. And tech titans like Dell and Hewlett Packard Enterprise have only added fuel to that fire, and continue to do so, as they strive towards XaaS.

So, what are the key benefits of HaaS and how can you utilize the model to its greatest potential for your customers? Let’s find out.

What is it?

According to TechTarget, HaaS is a procurement model that is essentially a leasing or licensing agreement in which hardware belonging to a managed service provider (MSP), which may be the original equipment manufacturer (OEM) for the hardware, is installed at a customer's site. A service level agreement (SLA) defines the responsibilities of both parties and intervals of upgrades/refreshments.

How can it help?

In this highly customizable model, your customers can gain the latest tech assets at an affordable rate, without needing to sink significant budget to purchase the assets outright.

As IT infrastructure needs can quickly change/evolve and hardware can easily become outdated, a HaaS arrangement can be especially attractive to small- to medium-sized businesses unable to dedicate spend to upgrading their tech mix every 2-5 years. Leveraging consumption- or subscription-based hardware models, companies can access the latest and greatest technologies and refresh their mix at regular intervals without having to (a) foot the bill or (b) spend time identifying and implementing the right solutions.

But that isn’t to say that large enterprises can’t reap these benefits, too. Like other related as-a-service initiatives, HaaS takes the onus of maintaining and replacing IT hardware off of the customer — meaning that instead of spending resources on specialized IT staff for hardware-related infrastructure issues, enterprises can instead have their teams focusing on organizational goals. Further, as-a-service models make it easier for companies of all sizes to scale up or down depending on varying needs.

And the benefits extend to your organization, as well. Dave Crist, President of Brother Mobile Solutions, recently summed it up well: “Instead of having to justify [capital expenditures] CapEx to purchase hardware, HaaS enables acquisition costs to become part of the organization’s [operating expenses] OpEx as a recurring budget line item. With HaaS as a procurement option, value-added resellers (VARs) will find it’s much easier for their customers to go from ‘hold to sold.’ Clients get the benefit of using the latest technology without the lengthy delays for approvals or the financial strain of taking resources away from areas in need of a long-term investment.”

In short, pay-per-use services will enable organizations like yours to better serve customers and expand opportunities by increasing their agility and freeing up cash for other IT investments. And, by building everything that customers need into a single, simplified monthly payment, you’ll make life easier for yourself, too.

How can I leverage it?

As the demand for operational expense-based models increases, many tech giants are rising to the challenge. In 2019, Hewlett Packard Enterprises (HPE) announced its plans to pivot to an as-a-service company across all of products, including servers and networking devices, as consumption-based contracts through XaaS (known as HPE Greenlake) by next year.

That same year, NetApp introduced Keystone, a solution that enables customers to purchase on-premises and cloud-based storage capabilities – either outright or on a consumption models – and allows data to be migrated as needed across on-premises, private clouds or public clouds ­without concerns over future requirements.

And it isn’t the only sheriff in town. Dell Technologies’ APEX — a portfolio of as-a-service offerings — continued to ignite the HaaS shift since its unveiling in May 2021. Under these new offerings, businesses can access Dell’s storage, servers and other IT equipment using either an as-needed, consumption- or subscription-based model, tailoring the hardware to their unique needs. Especially as businesses operate in an increasingly uncertain market, the ability to tailor services based on individual needs has become key. 

As an MSP, partnering with a platform provider that can help you fold HaaS into your existing offerings suite — software, cloud background, and now hardware — makes you even more competitive with customers who often don’t want the added headache of managing hardware on their own. The HaaS model with solutions like Dell APEX and HPE makes it easy to get exactly what you need, when you need it, and routinely upgrade to the best in the business without unnecessary investment.

Interested in leveraging Dell APEX, HPE or similar as-a-service solutions for your customers? Arrow can help you expand your portfolio, build recurring revenue streams, and deliver higher value services to your clients.

Contact us today.