Hardware as a Service: Eight benefits and four disadvantages of HaaS

As office technology becomes increasingly enmeshed in daily operations, slow, insecure, obsolete technology imposes exponential negative effects on the bottom line. On outdated tech, an employee can easily lose three to four hours every week. This impact spread over multiple employees over the course of the year can profoundly reduce productivity. Far worse, the failure or compromise of an outdated server is an immediate crisis for any business.

 A well-designed HaaS agreement covers equipment from acquisition to disposal and guarantees that a business has relevant, fast, and capable hardware at all times by default. 

An IT equipment lease will require some initial consideration. Once the decision is made however, managers no longer need to decide when to maintain hardware, replace servers, update VoIP systems, or weigh the financial advantages of repairing versus replacing technology. Cradle to grave care allows a business to focus on their area of expertise without worrying about the tools they need. 

A laptop becomes obsolete far faster than a bulldozer, making an old investment adage exceptionally relevant in the case of business technology. “If it appreciates buy it, if it depreciates, lease it.” 

Compared to other capital assets, office technology depreciates very rapidly: laptops should be replaced every three years, servers every five years, and network equipment every eight. This short lifecycle requires accountants to frequently revisit some hairy (and often depressing) calculations. 

Not only does a HaaS agreement eliminate depreciation calculations, but it also converts difficult to project capital expenses into a consistent monthly payment. Instead of worrying how capital expenses will vary year to year, managers can rely on a single monthly number throughout the life of the lease. 

When a HaaS agreement is secured through an MSP, businesses can simplify and reduce their overall IT budget–potentially in one monthly payment. 

Although every MSP is different, a high-quality IT support company can combine internet, VoIP phone, cybersecurity, business software, complete IT support, cloud management, backup, and all office hardware in one monthly operations payment. These bundling opportunities profoundly benefit SMEs in particular. They can allow time-strapped managers and owners to make one decision that can completely outsource their IT needs, reduce budget uncertainty, increase their security, and ensure tech relevance. 

Many small businesses have a perfectly useful closet clogged up with old monitors, desktops, and servers. Chances are, no one in your business (or on Craigslist) has any need for a computer with a dial-up modem, floppy disk drive, and a rollerball mouse. Even if your retiring tech is not quite that old, you still have to figure out what to do with it once it has aged out of service. At the end of a lease, it disappears and is replaced by fresh, useful hardware.  

When an SMB purchases its IT equipment with cash or via a loan, it reduces its overall purchasing power. There is either less money in the account or less available at the bank. A lease impacts monthly operational expenses, but leaves purchasing power intact. Businesses can then use that purchasing power on other capital expenses. 

Nothing is more frustrating than malfunctioning tech. When a computer stops working for you and starts to work against you, productivity goes out the window. Instead of spending hours Googling a solution, HaaS providers will support all hardware related maintenance issues: screens, ports, chips, power cords, and more. HaaS clients that bundle the service with a full-service MSP will have support for any and all tech needs. 

If a business is able to purchase equipment outright, they can avoid impacting their monthly operational budget through a lease or loan payment..

Businesses that own their equipment can add, subtract, or change their office equipment at any time without consulting a third party. Though clients can make those changes in a HaaS agreement, they would need to go through their provider to do so.

Some businesses rely on their capital depreciation schedule of capital costs to reduce their tax burden. Since HaaS agreements completely eliminate capital expenses from leased equipment, a business cannot write off depreciation for that tech.

The longer that a business is able to use its technology, the more financial sense it makes to buy it. For some longer-lived tech (like network equipment), this may make sense for some businesses. However, this often comes with the cost of accumulating outdated, slow, or vulnerable equipment that may cost your business just as much (or much more) due to delays or cybersecurity attacks.