How Tech Vendors Can Excel Using HaaS (Hardware As A Service) Model

Subscription-based service is now the default payment system for consumers, it is so deeply entrenched that we don’t even know it affects almost every financial decision we make.

Do you pay £800 for your new iPhone or £40 a month? The reason you’re exhausted at work Monday morning is that you spent Sunday night binge-watching House of Cards on Netflix, how much do you pay for the privilege? A flat rate of £8.99 a month. Your latest Sunday morning acoustic playlist on Spotify, did you buy each individual track for 99p or do you just pay £10 a month?

You already know the answers and anyway, you get the idea.

Somewhere in the early 2010’s consumers slowly started to realise that owning a song or a movie was kind of reductive, especially with the latter (once you’ve seen Sharknado, you really don’t need to see it again). Consumers gradually became more accustomed to the idea of leasing a service, rather than buying a product from said service. Spending a tenner a month to use all of iTunes rather than 99p to listen/keep one song from the music giant.

Reasons, as well as cost, included the sleek user interfaces that Netflix and co could offer and the fear of danger due to illegal downloading (something absolutely no one ever, ever did).

Paying for subscription-based services is the done thing.

This begs the question then, why aren’t vendors offering subscription services on products to their end-users?

Reluctance to innovate, insecurity and a desire to stick to knowing what they do.

Subscription services are the future because the benefits for you are too good to pass up.

Paid, in full, on day one. Offering a finance package that centres on subscription-based services means you get all of the payments on day one from your finance provider. As well as the equipment these include all of the managed services that subscription-based services have to offer.

We all know cash flow is the lifeblood of every business, for tech vendors, renting out a service on a monthly basis can mean waiting a long time to see the benefits of renting out equipment and/or service which in turn can see cash flow stagnate to figures that don’t help the business.

Leasing ensures the tech vendor receives all the money for their service in one lump sum, meaning they can forget about waiting for a small monthly payment over a lengthy period of time. Receiving this money can help the business move forward, grow and invest in a time frame of their choosing.

With finance, you, the vendor, are in control.

Customer retention. Is the customer happy with their equipment? Happy that their maintenance, upgrades and security are all sorted involving minimal effort for themselves? You can pretty much guarantee they’re going to want to repeat business if it ain't broke don’t fix it right?

Offering up a leasing package can be a simple thing to explain and, more importantly, easily interpretable by your end-user. Treat the lease like a phone contract, rather than paying £800 for the new Samsung you only pay £30/£40 a month for 18 months (about the time it takes for a new piece of technology to come out), once that time has elapsed, voila! A newer, shinier Samsung drops through your letterbox, and guess what? You haven’t paid a penny more for it.

Understandable cost objections from your end-user dissipate. No longer are they paying, say, £18,000 for 20 state-of-the-art iMacs they’re now paying £400 a month. All of a sudden the cost of this equipment isn't as big of an issue. This is especially important for small businesses looking to expand quickly without affecting their profit margins.

It allows customers to gain access to hardware on an as-needed basis. HaaS is often used by businesses that need consistent access to hardware but don't want to invest in the upfront cost of purchasing it outright. With HaaS, businesses only pay for the hardware they use, making it a more flexible and affordable option. While HaaS can be a great way to save money, it's important to make sure you're getting quality hardware that will meet your needs.

The transference toward a subscription-based model is happening, we have seen it revolutionise the world of consumer goods and it's only a matter of time before leasing sees a similar change. Get it on the ground early with Love Finance and become part of the cutting edge.