Understanding Hardware as a Service (HaaS)

May 9, 2023

Understanding Hardware as a Service (HaaS)

Hardware as a service (HaaS) is the latest method for procuring and maintaining IT infrastructure, combining procurement and lifecycle services on a subscription basis.

Two key components of Hardware as a Service

The HaaS model is comprised of two elements: equipment procurement and IT services.

From a procurement PoV, HaaS transforms a capital expense into an operating expense by letting companies lease computing hardware they'd traditionally buy.

HaaS is often utilized for IT equipment that requires high capital expenditures, such as laptops, desktops, and tablets. HaaS is also commonly used for particular devices requiring frequent maintenance, such as printers.

From an IT services PoV, HaaS contracts typically contain provisions to maintain and support the equipment lifecycle so that IT teams can offload support for end users.

HaaS programs bear some similarities to traditional IT leasing. However, under traditional lease financing arrangements, internal IT teams are still responsible for supporting the equipment lifecycle for IT systems.

Hardware as a Service variants

The HaaS service model applies to a variety of market offerings.

PC Original Equipment Manufacturers (OEMs) and their Managed Service Provider (MSP) partners offer PC as a Service (PCaaS) that includes leased laptops and peripherals with lifecycle services.

Network equipment manufacturers such as Cisco offer Network-as-a-Service (NaaS) that deploy networking hardware and subscription to capabilities related to the underlying hardware, including port capacity and cybersecurity features, management tools, and lifecycle services.

Specialized vendors such as Universal Communications as a Service (UCaaS) vendors also offer HaaS. For example, Zoom offers HaaS for phones and room video conferencing systems.

Financial Reasons to Consider Hardware as a Service

Hardware-related costs constitute a significant portion of IT expenditures. HaaS offers businesses the option to avoid the total purchase price upfront, instead paying monthly fees and allowing them to improve cash flow and profitability. Companies can also devote freed-up cash flow to more strategic uses, such as new product innovation that will lead to top-line revenue growth.

HaaS allows IT teams to adopt a cloud computing-style business model for procuring and operating end-user computing and other hardware-intensive disciplines. This is similar to how infrastructure as a service (IaaS) and also software as a service (SaaS) have transformed how IT organizations buy and run data center server hardware and application software.

Operational Reasons to Consider HaaS

HaaS also offers operational benefits to IT teams in several dimensions:

HaaS challenges

Despite its benefits, the HaaS market is highly variable, and some offerings come with complications or shortfalls that pose real challenges to effective adoption.

Vendor Lock-In

The first challenge is vendor lock-in. Most HaaS offerings are built to deliver a single vendor or OEM's products. This means, for example, that if a Microsoft-based PC vendor is your HaaS provider, you will not be able to procure Apple devices, which is problematic given the rapid growth in Apple's enterprise end-user computing market share—avoiding single vendor lock-ins an essential consideration for implementing HaaS.

Procurement inflexibility

Another related challenge is procurement inflexibility. Some emerging HaaS providers offer multi-vendor hardware options, but in most cases, these HaaS vendors require lease-based procurement with significant markups. Sometimes, single-year HaaS lease rates from these emerging vendors can double the purchase price.

Poor automation and employee experience

Some HaaS offerings, such as PCaaS, were innovated before cloud automation and employee experience became standard in IT service offerings. While PCaaS providers may offload logistics, they don't offer any SaaS workflow automation, visibility, and employee self-service capabilities. This lack of modern SaaS automation is why after multiple years of MSP PCaaS offerings on the market, they constitute only a tiny fraction of MSP outsourced desktop service clientele.

Limited lifecycle services

Some IT infrastructure, like enterprise networking equipment, is deployed for years without needing repairs or replacements. However, in the case of end-user equipment, the completeness and responsiveness of lifecycle services significantly impact the financial and operational effectiveness of HaaS. Unfortunately, just as some PCaaS offerings lack cloud automation, they also lack SLAs tuned to employee experience. Delivering a laptop is a good logistical service, but employee engagement and productivity will be lost if not supplied before onboarding. Similarly, if replacements aren't timely, employees can suffer costly downtime.

HaaS evolution: SaaS + flexible procurement + employee-centric lifecycle services

The HaaS model has pushed IT hardware to cloud business models. The state of the art for modern HaaS includes:

Firstbase is the pioneer and leader in modern HaaS for end-user equipment, including IT devices and ergonomic furniture. The Firstbase platform fuses SaaS automation and employee experience, entire lifecycle physical operations services, and flexible procurement, including purchase, lease, and supply-your-own options. To learn more, request a demo.