Business trend alert: Hardware-as-a-Service

Adoption of the “as-a-Service” model is explosively gaining popularity in the business environment. What started out as Software-as-a-Service (SaaS) has evolved into other various pay-as-you-go offerings such as Hardware-as-a-Service (HaaS).

Defining HaaS

With HaaS, businesses are spared from paying the large upfront costs of owning hardware. Instead, they pay an affordable monthly fee to lease it. This allows them to access equipment — bundled with managed services — from a managed IT services provider (MSP). So instead of paying for the hardware itself, they are charged for hardware services. Examples of such hardware include laptops, tablets, smartphones, servers, switches, and printers.

Under this procurement mode, the traditional one-time transaction of an equipment purchase is replaced with a long-term relationship between lessee (client) and lessor (MSP). So while the leased hardware is installed in the client’s site, the MSP is the one responsible for monitoring, maintaining, upgrading, securing, repairing, or replacing it. This eliminates any equipment-related concerns for the client, since the MSP will handle them.

HaaS global adoption

Given the cost efficiency and flexibility that it provides small- and medium-sized businesses, the global HaaS market is forecast to grow 27% by 2025, to $305 billion from $41 billion today. Consequently, hardware spending is forecast to steadily decrease.

HaaS adoption by offering

The supply of desktop computers dominated the HaaS market in 2018 with 40% overall market share and it is estimated to maintain its leading position over the forecast period of 2019–2025. Printers are also quite popular among HaaS users, followed by networking equipment, desk phones, and servers.

HaaS adoption by industry

The adoption rate of HaaS varies across industries, with the retail/wholesale sector holding the largest share, followed by the education and financial services industries. In fact, the 2018 Spiceworks survey revealed that around 31% of retail and wholesale organizations already use the HaaS model for one or more types of devices, and 7% of the remaining retail businesses are planning to adopt HaaS within the next two years. HaaS is particularly popular in this sector since these organizations have hundreds or thousands of stores spread across the country and it is costly to employ IT staff in each location.

It’s also worth noting that 29% of organizations in education and financial services are already using the HaaS model. HaaS is also widely used by the banking, insurance, government, and manufacturing sectors, but it is the IT and telecom industry that is expected to fuel the growth of the market during the forecast period.

HaaS adoption by region

North America is anticipated to hold the largest share of the HaaS market during the forecast period. This is due to the huge number of existing HaaS providers and users, and the high awareness of HaaS throughout the region. However, the highest growth rate is expected to come from the Asia-Pacific region, given the growth of SMBs there. The markets in Europe, South America, the Middle East, and Africa are expected to follow the trend of robust HaaS adoption during the forecast period.

Understanding the trend

When asked why more and more organizations are adopting HaaS, respondents of the Spiceworks survey revealed the following reasons:

  • Reduced burden on internal IT staff (71% of respondents)
  • Better troubleshooting and support (47%)
  • Easier setup and maintenance (43%)
  • Access to less obsolete technology (43%)
  • Lower total cost of ownership (39%)
  • Reduced expenses (38%)
  • Flexible payment options (17%)
  • Better asset management (16%)
  • Improved security (16%)
  • Increased scalability (15%)

So what’s the best path forward for me?

The growing adoption of HaaS doesn’t necessarily mean you should jump on the bandwagon right away. It’s best to take the time to assess your IT needs and the available HaaS offerings in your area. Stay tuned for our next blog, “Is Hardware-as-a-Service right for your company?” to help you decide, or better yet, give our experts at Leverage IT a call right now to get immediate professional advice.

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