In the past, the only way for organizations to update their outdated IT infrastructure was to make a large capital expenditure (CapEx) to purchase newer hardware, only to repeat the same expenditure a few years down the road. Today’s organizations have it better because a new hardware procurement model has emerged in recent years as an alternative to the traditional transactional sales model. It’s called Hardware-as-a-Service (HaaS).
Just like other “as-a-service” models (e.g., SaaS, PaaS, and IaaS), HaaS shifts acquisition costs to predictable, reoccurring operational expenses (OpEx). This makes the latest hardware available to organizations whose budgets are not large and flexible enough to accommodate upfront, lump-sum purchases.
But is Hardware-as-a-Service cheaper than purchasing – especially in the long run? Let’s find out.
Table of Contents
Is Hardware-as-a-Service Right for You? Key Considerations
1. Know What You’re Paying For
Hardware purchases are traditionally associated with large capital expenditures and sometimes eye-watering maintenance costs. The HaaS model allows organizations to reduce their hardware-related expenses into a single operational expense dictated by a monthly, annual or multi-year contract. When organizations know exactly how much money they spend on hardware every month, they can better allocate their financial resources and be bolder with their investments.
Benefits of Choosing Hardware-as-a-Service
Because Hardware-as-a-Service bundles installation, maintenance, and upgrades together with the associated hardware, organizations that choose this model never face any additional hardware-related expenses. With this predictability comes the confidence to allocate financial resources toward other endeavors, instead of setting them aside for rainy days.
So, which is cheaper?
HaaS is the cheaper option for organizations that would have to outsource hardware support anyway or hire an in-house IT employee to take care of it.
2. Know Who Owns the Hardware
It’s important to stress that organizations that decide to pay for their hardware as a service on a monthly, annual, or multi-year basis never end up owning the hardware. The ownership of the hardware remains in the hands of the HaaS vendor from the first day of the contract period until the last one.
With purchasing, the ownership of the hardware is transferred to the buyer as soon as the purchase is finalized. This means that organizations that own their hardware can recoup some of the purchase price by selling it on the second-hand market. More importantly, they can do anything they want with the hardware because it’s completely theirs.
Benefits of Choosing Hardware-as-a-Service
For most organizations, especially smaller ones, these advantages of hardware ownership have little to no value. Indeed, hardware ownership can be a burden rather than an advantage because it means additional responsibilities and potential expenses.
What most smaller organizations really want and need is dependable hardware that can always support their needs, and that’s exactly what the HaaS model delivers.
So, which is cheaper?
For most organizations, hardware devices are non-revenue generating assets that come with plenty of non-recoverable costs, including the cost of installation and maintenance. For such organizations, HaaS is the more cost-effective way to go.
3. Know How Scalable Your Hardware Is
All organizations strive to pay only for the hardware resources they really need. That’s not an easy goal to accomplish even when business is stable, but disruptive events like the coronavirus pandemic can increase its difficulty exponentially—particularly for those who purchase their hardware upfront.
Benefits of Choosing Hardware-as-a-Service
Organizations that pay for hardware as a service, on the other hand, are in a much better position to scale their hardware based on their current needs since they’re limited only by their contracts. If the contracts are flexible and written with scalability in mind, then scaling hardware resources up or down can be accomplished without any friction, allowing organizations to pay for only what they use.
When hardware can be effortlessly scaled as needed, it becomes much easier for organizations to take advantage of growth opportunities presented to them, and it also becomes easier to cope with seasonal fluctuations in demand and unavoidable disruptive events.
So, which is cheaper?
Hardware purchasing makes it more difficult and expensive for organizations to scale their IT infrastructures, so HaaS is almost universally the cheaper model when hardware needs are not static.
The Verdict: HaaS vs. Purchasing
The bottom line is that Hardware-as-a-Service is cheaper than purchasing for most small and medium-sized organizations. By exchanging a patchwork of unpredictable capital expenses for a single operational expense, organizations can enjoy access to hardware resources that always reflect their current needs.
Furthermore, they don’t have to worry about any of the burdens that go hand in hand with hardware ownership.
If you would like to learn more about HaaS and how it can benefit you, contact us today and we’ll help your team leverage current tech while conserving your cash on hand.
