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

by Jon Lober | NOC Technology

Everything a small business needs to know about leasing office technology.

Office technology is a headache for many managers: fickle, costly, and quickly obsolete. Hardware as a Service (HaaS) solutions can allow businesses to avoid the need to source, maintain, update, and dispose of essential tech.


Could it make sense for your business?

What is hardware as a service (HaaS)?

In simple terms, hardware as a service (or HaaS) is a business technology lease. In a HaaS agreement, a tech provider supplies the client business the IT hardware and associated maintenance they need to operate. HaaS may be offered by a specialized provider as a standalone service or by a managed service provider (MSP) that bundles the lease with a variety of other IT services: internet, cybersecurity, software, helpdesk support, VoIP, and more.

 

Like other types of leases, most hardware as a service agreements provide equipment, repairs, and maintenance over a specified period of time. The terms of each HaaS contract vary substantially depending on the needs of the business and the capabilities of the provider. Some businesses may only need a few laptops while others may be interested in laptops, desktops, servers, VoIP phone systems, and networks printers.

 


Eight benefits of leasing office tech.

In general, leasing provides many of the benefits of ownership, with fewer headaches.

  • 1. Consistently up-to-date hardware.

    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 On outdated tech, an employee can easily lose three to four hours every week.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 Far worse, the failure or compromise of an outdated server is an immediate crisis for any business.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. 


  • 2. Fewer time consuming decisions.

    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. 

  • 3. No depreciation calculations.

    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. 


  • 4. Consistent operational expenses.

    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. 

  • 5. Opportunity to bundle HaaS with other IT services.

    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. 


  • 6. No need to offload obsolete hardware.

    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.  

  • 7. Greater purchasing power.

    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. 

  • 8. No hardware maintenance costs or concerns.

    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. 

Four benefits of buying office tech.

The great thing about buying your office technology is that you own it. The downside is that… you own it.


  • 1. Lower operational expenses.

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

  • 2. Full control of all equipment at all times.

    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.

  • 3. Tax benefits.

    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.

  • 4. Potential for possible long-term savings.

    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.



Want to learn more about hardware as a service?


If you think that HaaS might be a good fit for your business, but you are still not sure, check out our HaaS decision-making guide. We cover seven factors that small businesses should consider before making a final decision to lease or buy their office equipment.


HaaS Guide 2024


On the other hand, if you are ready for some hard numbers on what it might cost to implement in your business model, let us know! NOC Technology is an experienced full-service MSP that offers HaaS and other managed IT services in St. Louis, throughout Missouri, and the entire Midwest.


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