Just think about just how many subscription products or services you use in a day. The chances are that the number is a lot higher than you think! From your car, your Netflix, and even your coffee, there is a subscription for almost everything in today’s world!
This concept is here to stay too, with reports indicating that 75% of organizations will be offering a subscription-based service by 2023.
In the business world, a subscription can also be called “as a service”. There are a few variations of this you may have heard of, including Desktop as a Service, Technology as a service, PC as a Service, and even Everything as a Service!
Device as a Service. On the other hand, Daas as it’s commonly referred to be very much in the spotlight now with IT purchasers. As we come out of the Pandemic, many companies are looking for a different way to source their computer needs… one that also is cash flow friendly yet flexible.
This solution is still a relatively new concept. Back in 2015, no major PC manufacturers offered a DaaS solution to acquire hardware. However, by 2019, that changed dramatically, with 65% of major PC makers offering DaaS solutions.
With DaaS, manufacturers offer their own laptops, their desktops, with their own productivity and security software. The devices are not purchased outright by the business as if they would have previously been. Instead, they are paid for on the subscription model.
PC manufacturers such as Dell, HP, and Lenovo have all moved towards services and software, as profit margins on the actual hardware itself have fallen by the wayside. They have struggled to sell these as individual services, but Daas has allowed them to bundle it all up and make money again.
Sounds like a win-win for both customers as well as manufacturers. What they have not resolved is the actual financing element of the solution. They are computer manufacturers, not banks or finance houses. Their expertise does not go beyond what is inside the boxes they ship. As a result, Dell, HP, Lenovo, even Apple all rely on a third party to finance their Device as a service solution.
Take Lenovo for example. Lenovo Financial Services is a separate company called CSI Leasing, which was previously known as Citibank. Apple partners with a French bank called Banque National Paris, while HP use a Dutch bank called De Lage Landen.
Customers who have been sold this new “as a service” solution can get frustrated with having to deal with a distant, separate finance company, rather than the helpful PC people who they thought they were buying from.
Regardless of whatever the PC people sell the client, the contract will be with that mysterious finance company, and their terms may not be easy to negotiate.
By definition, a pure ’as a service solution’ is a subscription where you pay for what you use. A ‘Pay as you go’ agreement where if you change, add, or remove devices, the amount you pay should be altered depending on the equipment you need. Changing “up” or “down” should not incur a financial penalty every time.
Finance companies do not like early settlements and terminations, and what does the PC Manufacturer do with the 3-year warranty pack on your Laptop that you have just returned? This is where the tenuous relationship between the third-party finance house, and the PC Manufacturer, can come back to bite you.
In effect, an organization considering a DaaS solution should be looking at the reviews and service levels of the finance company, and not just those of the Solution provider. This is because it is the finance company that will be amending your direct debits and collecting your money.
It is no secret that most financial institutions get bad internet reviews. However, if you drill into the detail of the comments and feedback from some of the finance partners to the PC manufacturers, then few themes struck me…
Firstly, hidden fees such as an admin fee of £200 just to add an extra device is not uncommon. In addition, there are potentially additional costs for insuring equipment you may have already insured yourself.
Secondly, there is the hassle in returning equipment and returning it without financial penalty.
Thirdly, according to the comments, they do not seem to reply to any emails or answer the phone…
You are probably an expert in IT, and in the past, have traditionally bought your kit and asked someone else to write the cheque. You can take that one path. DaaS puts more burden on the decision maker as you are committing your organization to a typical 3-year contract, which may include support, software and more…
We have seen many fanciful finance solutions, and finance companies for that matter, come and go. The advice to any business is this; ask the difficult questions. Get an SLA on the finance people just as you would with the IT people. Talk to them directly, and that means more than having a conversation with the salesperson. Ask the difficult questions and do your due diligence.
Because of this, DaaS may take longer to implement, but get it right and it’s great! Get it wrong or rush it, and it is an expensive and painful exercise.
Andrew and his brother founded HardSoft back in 1984 when they were just teenagers. How things have changed!
Devices for Teams is just one solution of a portfolio of IT leasing solutions for business.
Daas without the Faff.
Andy has interests in Movies, food and wine!
LinkedIn: Andrew Morgan