What Is HaaS (Hardware as a Service)?

Understand what the hardware as a service model consists of and why it makes good business sense for manufacturers and end users.
What Is HaaS (Hardware as a Service)?
Anant Raj Pathak
August 8, 2023
What Is HaaS (Hardware as a Service)?
Anant Raj Pathak
February 7, 2024

5

min read

What Is HaaS (Hardware as a Service)?

HaaS (Hardware as a Service) is a way for small, mid-sized businesses or enterprises to offer new subscription-based business models, typically including both products and services. For manufacturers, HaaS offers enormous potential for growth. In this post, we'll take a deep dive into what HaaS is and why it makes good business sense. 

What is Hardware-as-a-Service (HaaS)?

Hardware as a Service (HaaS) is a business model wherein a manufacturer or a managed service provider (MSP) sells hardware while the customer primarily pays for the usage of the hardware, as opposed to the hardware itself. This usage payment can be based on a monthly fee, a duration of usage-based fee (minutes or hours of operation), a telemetry-based fee, a service or feature-based fee, or any number of other financial models, depending on the chosen business model and the capabilities of the technology managing the HaaS solution. 

In the HaaS model, the manufacturer or MSP assumes responsibility for monitoring, maintaining, updating, upgrading, or replacing the hardware as necessary.  This can be an attractive option for end users since it enables them to access state-of-the-art hardware without high upfront purchasing costs or labor-intensive maintenance. The HaaS model also helps these businesses ensure that outdated or malfunctioning hardware is decommissioned and replaced promptly. This enables companies to focus on their core competencies rather than dealing with the distraction and expense of owning, configuring, and maintaining specialized equipment.

For both manufacturers and channel partners, HaaS offers a new path to recurring and predictable revenue alongside the opportunity for penetration into new and price-sensitive markets. 

For manufacturers, HaaS enables the development of long-lasting, sustainable customer relationships. HaaS-enabling technologies offer full visibility into the entire value chain and an in-depth understanding of the intricacies of the customer experience. For channel partners, HaaS enables the introduction of new and lucrative cloud-based services like remote maintenance and support. For both manufacturers and their channel partners, HaaS enhances cross and upselling opportunities and facilitates more data-driven strategic decision-making based on actual end customer usage data.

What Are the Major Benefits of HaaS for End Users?

The hardware-as-a-service (HaaS) model offers numerous benefits to organizations of all sizes, notably: 

  1. Budget - With HaaS, businesses don't need to purchase hardware upfront. Instead, they can buy hardware via a subscription-based model – eliminating hardware CapEx and moving to OpEx expenditure. 
  2. Constant updates – With HaaS, organizations don't just buy a product; they buy a solution - with remote access, continuous firmware updates, and the ability for the manufacturer and MSP to ensure everything works and is configured correctly. 
  3. No need for physical access - Organizations can now remotely access and investigate devices, resolve issues remotely, and escalate tickets to the MSPs or manufacturers with direct access to the malfunctioning device, saving time and hassle. 
  4. Better security, better compliance – By managing updates and patches while applying industry best practices, HaaS vendors help businesses ensure infrastructure confidentiality, integrity, and availability. 

What Are the Major Benefits of HaaS for Manufacturers?

HaaS empowers manufacturers to create new revenue streams, streamline operations, and enhance competitive edge through: 

  1. Creating recurring and predictable revenue – With the HaaS mode, manufacturers can generate recurring, predictable, and long-term revenue streams, ensuring a cash flow over time.
  2. Enabling market expansion and penetration - HaaS creates new opportunities for manufacturers to enter new markets, notably price-sensitive markets. Subscription-based and other innovative business models lower end-user CapEx - helping manufacturers attract customers who may not have the upfront capital to invest in their hardware. 
  3. Strengthening the customer relationship - HaaS helps manufacturers develop long-lasting and sustainable customer relationships by offering deep visibility and understanding of the value chain and the customer experience. This enables them to better tailor their offerings and support to meet customer needs.
  4. Expanding service offerings and upselling opportunities - HaaS facilitates cross-selling and upselling, allowing manufacturers to leverage customer usage data to identify additional product and service offerings that align with customer needs.

Xyte: The future of HaaS

Xyte is driving the future of HaaS with an end-to-end HaaS solution that enables hardware manufacturers to embrace new opportunities in the subscription economy – managing the HaaS business model at scale while delivering more precise and lucrative service and feature enablement.

With Xyte, manufacturers can quickly shift from a capital expenditure (CapEx) model to one based on operational expenditure (OpEx). The Xyte-powered subscription-based pricing helps manufacturers win deals with cash-sensitive customers, build stronger longer-term customer relationships, generate recurring revenue streams, and monetize emerging business models.

Conclusion 

The HaaS model can be a cost-effective solution for businesses to scale their hardware while creating significant growth potential for manufacturers. HaaS empowers manufacturers to manage their hardware at customer sites, leveraging usage-based payment models while combining advanced feature toggling and other remote functionality. It allows them to generate new recurring and predictable revenue streams and gain new market share while presenting more flexible business models for their customers. 

FAQs 

What does HaaS mean?

HaaS stands for "Hardware as a Service." It refers to a business model in which businesses can access and utilize the hardware through a subscription-based model instead of purchasing the hardware outright.

What are HaaS examples?

Examples of HaaS (Hardware as a Service) encompass various subscription-based business models. Here are some notable instances:

  • Device-as-a-Service: This model enables manufacturers to offer devices like laptops or tablets on a subscription basis, providing customers with the latest technology without the heavy initial cost.
  • Lighting-as-a-Service: Catering to the lighting industry, manufacturers can offer advanced lighting equipment through subscription models, aligning with energy efficiency and customization needs.
  • Display-as-a-Service: With this approach, manufacturers can sell cutting-edge display screens through a subscription, offering flexible and cost-effective solutions for businesses and individual users alike.
  • Printers-as-a-Service: This service shifts the payment structure from a traditional upfront acquisition cost to a pay-per-print model. It's a practical way for customers to have access to state-of-the-art printing facilities based on their specific printing needs.

Here are a few examples of companies that have successfully adopted the hardware as a service business model:

  • Nespresso: They have offered subscription plans that include coffee machines to ensure customers always have access to fresh coffee at home or in the office.
  • Volvo: Volvo's "Care by Volvo" subscription service includes a car lease, insurance, and maintenance in a single monthly payment, providing flexibility and ease to customers with less cost.
  • BMW: Through their "Access by BMW" program, BMW offers vehicle subscription services that allow customers to use different models for a monthly fee, providing more flexibility than traditional buying.
  • John Deere: Recognizing the need for flexible farming solutions, John Deere has developed subscription services that allow farmers to access tractors and other machinery as needed without the substantial investment in ownership.
  • Caterpillar: Caterpillar has explored pay-per-use and subscription models for its heavy machinery, providing construction businesses with more flexible options for accessing equipment.
  • Xerox: Their Managed Print Services allow businesses to pay for the print services they need without owning the actual machines.
  • Philips: Philips offers Medical Equipment-as-a-Service, providing healthcare organizations access to the latest medical technology without needing to purchase the equipment outright.

What are hardware services provided in HaaS?

Hardware services refer to provisioning, monitoring, managing, and maintaining organizational hardware resources, including configuration, firmware upgrades, support, preventative maintenance, feature enablement, and more.

Related Resources 

Want to learn about how Xyte is empowering manufacturers to provide HaaS? Contact us today!

Tags

subscriptions
services
usage-based
telemetries
customer relationship
channel partners
recurring
revenue
capex
opex