Hardware as a service – and why you need to know about it

Software as a service (SaaS) is becoming increasingly common these days, especially in business. People know what it is, and they are using it because the information and communication technology (ICT) industry is experiencing a shift away from products toward services.

Software providers are increasingly changing their offerings in line with this trend. For example, instead of buying the newest version Microsoft Office on a CD (a product), get the latest Office 365 offering with upgrades included for life – provided you pay the monthly fee.

Less common, however, is hardware as a service (HaaS).

So, what is it? And why should you take note?

HaaS removes the need to own hardware. Instead, you get access to the latest hardware for a fixed monthly fee. It includes everything from computers, printers, servers and firewalls. And the best HaaS options include maintenance, insurance and even accompanying software and installation in your monthly fee.

While people are getting used to paying for software as a service, many still feel like they need to own their own hardware.

But if you think about it, paying a monthly fee for access to ICT hardware is hardly a new idea. For years now most of us have had a monthly mobile account for our phones. HaaS takes this concept a few steps further – with even greater benefits for your business.

A properly structured HaaS offering gives you:

  • Cash flow benefits: getting access to the use of an asset without having to layout the initial capital upfront.
  • Improved gearing: no more long-term liabilities on the balance sheet due to financing non-income-generating assets. It improves your financial gearing and makes your business more attractive to potential financiers and/or investors.
  • Alternative financing: if you’re a start-up or entrepreneur, and you don’t have surplus cash or access to finance.
  • Income-generating benefits: having more capital or improved gearing allows you to invest in income-generating assets with which to grow your business.
  • Insurance included: no extra cost to insure your rental hardware.
  • Tax benefit: renting gives you the ability to claim as much as 43% back in taxes alone on your annual cash flow (15% for VAT and 28% of income tax if you are a company).
  • Reduced downtime: stand-by replacement units allow you to continue with your business while the HaaS service provider deals with the repairs.
  • Support benefit: the best HaaS options give you rental units with dedicated support services.
  • Increased productivity, decreased downtime, and better data protection due to state of the art hardware.

For all these reasons, my recommendation to a growing business is that, unless a depreciating asset like hardware is generating direct income, HaaS offers you many benefits over traditional hardware ownership.

It is a great way to keep current with rapidly evolving hardware innovations, while still controlling costs and improving your balance sheet.

Feel free to contact me at hannes@grovation.com for any more information.

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