UC Hardware-as-a-Service: Knowing Your OptionsUC Hardware-as-a-Service: Knowing Your Options
An deep-dive introduction to hardware-as-a-service for the IT decision maker
February 25, 2020
In the last two years, the number of options an IT decision maker has for procuring meeting room collaboration equipment has increased notably. These options go by several names — device-as-a-service (DaaS), room-as-a-service (RaaS), or even the more universal hardware-as-a-service (HaaS). In each case, the model is similar to other service-based models, where users rent or lease rather than purchase a UC provider's hardware products. Although the concept isn’t new to many technology buyers, it’s in its infancy for the buyers of UC products, and in particular, buyers of video collaboration equipment.
How We Got Here
Five years ago, no one associated the "as-a-service" term with a piece of hardware. At that time, the name was mainly linked with software and was already the de facto terminology for cloud computing technologies. Companies like Saleforce.com built their entire business models exclusively on the SaaS model, extending IT decision makers a host of advantages when purchasing large, expensive software solutions. Some examples of the benefits include better cost management, more financial flexibility to scale the technology, and some degree of future-proofing by aligning support and upgrade expectations to the perpetual characteristic that defines the SaaS business model.
Then the hardware vendors wanted to join the party. In 2016, HP and Microsoft rolled out DaaS offers to extend many of the same benefits of the software version to hardware. Now, an IT decision maker could view desktops, laptops, phones, and tablets as scalable assets with subscription-oriented payment models.
To be fair, there have been some forms of as-a-service hardware offerings in the UC space for a while. Cloud PBX providers like RingCentral and 8x8 have been offering lease programs on phones even before the 2016 HP and Microsoft offerings. And, vendors like Cisco and Poly have had some form of capital leasing with specific contract terms targeted to large customers.
However, within the videoconferencing segment, standardized turnkey offerings have only started to appear in force in the last year or so. Driven by the rise of cloud-based videoconferencing services, HaaS seems to be a logical step in aligning the OPEX business models of services-attached videoconferencing with the underlying hardware needed in the conference rooms.
Notable HaaS Trends
Two market trends are creating an environment prime for offers like HaaS to find success in the market. These are the rise of services-attached videoconferencing and the expansion of videoconferencing into smaller rooms.
The Shift Toward Services-attached Videoconferencing
Customers are finding their way to services-attached room-based video solutions such as Microsoft Teams Rooms, Cisco Webex Rooms, Zoom Rooms, LogMeIn GoToRoom, and Google Hangouts Meet Hardware, Lifesize meeting room offerings, and others, for a variety of reasons. But, one consistent characteristic of these models is the consumption of the video capability as a service versus as a one-time license embedded in the hardware. All good, but these customers still need the hardware to run these services-attached offerings. Many will buy it outright, but some will find this prohibitive and will look for similar consumption models for the equipment.
Expansion of Video to Smaller Rooms
In recent years, we’ve seen a significant shift from large conference room deployment toward smaller rooms. Video, as a workload, is leaving the limited uses cases needed by the C-suite and is becoming more accessible for all knowledge workers. Couple this with the noticeable adoption of personal video in UC solutions and room-based video continues its drive of becoming more ubiquitous in the corporate campus.
One outcome of this increase in the number of videoconferencing systems within an organization is greater complexity of and time required for maintaining the hardware. How old is the gear? Do we have spares in-house if a component breaks? Is the support contract up to date? The tasks related to this lifecycle management are time-consuming and low yield in terms of IT productivity. IT decision makers could save costs and increase value by simplifying or outsourcing these tasks.
Both trends can create uncomfortable road bumps when deploying videoconferencing. Interestingly, neither one is genuinely resolvable by a product feature. Nope — the root problem here is how to remove friction related to hardware procurement and lifecycle management. This is where HaaS steps in to help out.
Click below to continue to Page 2: HaaS Offers Available Today
HaaS Offers Available Today
Below are four relatively new HaaS offers that provide an overview of how the market is addressing this opportunity.
Cisco Webex HaaS
Cisco launched its Webex HaaS program in Q4 2019 and immediately came out with a portfolio of new or updated hardware products. Included within the Cisco offer are IP desktop phones, conference phones, room-based video and collaboration devices (Cisco Webex Room Series and Cisco Webex Board), and desktop collaboration devices.
Agreement terms are straightforward: For a three-year commitment, a customer receives hardware replacement and support during contract lifetime and gets full access to any software updates for the devices under contract. IT admins get access to Cisco Webex Control Hub, providing them the ability to manage users, services, and devices in a single online portal.
There is no minimum number of devices to start a HaaS agreement, and subscribers can add new devices to the plan at any time. For context, a customer can lease a Webex Room Kit starting at $139/month, a Webex Room System complete with monitors for $499/month or a Webex Board for $589/month. Alternatively, customers can pay annually.
At the end of the three-year term, the subscriber can do one of three things: 1) auto-renew the current hardware on a year-by-year basis, 2) refresh its rooms to the latest equipment and initiate a new three-year term subscription or, 3) cancel the subscriptions, at which point in time the devices lose their software licensing and become incapable of placing or receiving calls.
Cisco offers its Webex HaaS program in the U.S. through channel partners.
What's good about this program
The program extends to a full range of Cisco UC products under the portfolio. From the desktop to meeting rooms, Cisco can cover all hardware needs.
Cisco has aligned HaaS with the Flex licensing model it launched four years ago for the Webex product lines.
Lifesize RaaS
In December 2019, Lifesize updated pricing for its cloud videoconferencing service and launched a companion Lifesize RaaS offering. Customers can now buy room equipment outright or leverage the RaaS "pay as you go" offer to reduce upfront costs with transparent and predictable pricing on hardware.
Customers can choose among three hardware configurations: 1) Icon 300 + MicPod ($99/month), 2) Icon 300 + Phone HD ($135/month) and, 3) Icon 500 + Phone HD ($199/month). These align with a small/medium/large room strategy.
Contracts start with a two-year commitment, but can also be for three-, four-, or five-year terms. Customers pay annually, and at the end of the agreement, they can either renew with the same hardware or initiate a new contract with a different room package updated with more modern equipment.
During the agreement, the customer has access to unlimited Lifesize service and software support, including hardware advance replacement. This means if a customer experiences a hardware issue, it will receive a new device before needing to return the older device. Lifesize also provides access to its online management tool, the Lifesize Admin Console, from which IT admins can monitor the health of room systems and enable instant notifications for alert conditions, among many other device and account management capabilities.
What's good about this program
Single point of billing and contact for both hardware and cloud services
An "easy to follow" small/med/large room alignment of its RaaS
Straightforward information on its website, including pricing of service and RaaS offerings. No need to "contact sales to learn" more.
LogMeIn GoToMeeting RaaS
In June 2019, GoToMeeting launched its RaaS, GoToRoom with Dolby Voice product kit. The RaaS offer includes a Dolby Voice Phone, Dolby Voice Camera, Dolby Voice Hub, and the monthly software subscription for GoToRoom — all in a single, pre-packaged monthly payment.
Customers can sign up for one-, two-, three-, or four-year terms. At the end of the agreement, the customer can buy out the equipment and renew the service or return the gear and end the contract. Payment options include monthly, annual, or a single upfront payment for the full contract.
By way of example, a customer could purchase the Dolby room kit outright for $3,999 and signup for a $39 per month GoToRoom license, or sign up for the RaaS program for the same gear and pay $149 per month for three years. The RaaS program includes premium hardware warranty, support, and updates for the life of the subscription.
What's good about this program
A single, all-inclusive monthly payment: When customers purchase RaaS, they're receiving a comprehensive package containing the hardware rental, GoToRoom subscription, support, and premier warranty.
The potential exists for LogMeIn to add other hardware vendors, creating a best-of-breed portfolio for UC devices versus other vendors that are limited to their hardware offerings.
Poly DaaS
Poly targets its DaaS program at its cloud communications services partners with the intent for them to pass it through to the end customers. It enables service providers to offer Poly endpoints on a month-to-month basis with no minimum commitment and an extended hardware replacement plan — a new precedence in this space.
Poly positions its DaaS offer as a rental program for its current lineup of desktop and conference phones, as well as most of its enterprise headsets. It doesn’t presently include videoconferencing endpoints, but Poly says it’s monitoring the opportunity.
The Poly DaaS program includes extended hardware replacement, support, and services, as well as any shipping and provisioning cost all in a single monthly payment. The service provider can, in turn, pass this through to the customer as-is or bundle it with its monthly services or other value-added features. The customer gets access to a reliable UC endpoint with all supporting cost covered and has the flexibility to scale up or down as needed.
What's good about this program
Depending on how Poly's partners package it, this is an actual month-to-month program with the flexibility to scale up and down or cancel as needed.
It’s the first and only rental program to include enterprise headsets and offer associated hardware warranty and support.
Partners get to customize the offering with their services or value-adds.
Click below to continue to Page 3: Bottom Line
Bottom Line
There’s s no single answer to the question of whether HaaS is right for you, but this new consumption model will help when the decision expands beyond the IT decision maker.
If you’re considering a HaaS agreement, I recommend the following:
Consider accounting implications — Keep in mind the accounting rule that impacts how some organizations view a cost as OPEX or CAPEX. For example, a takeaway may be that your HaaS agreement may need to avoid pay-in-full options for your organization to acknowledge the OPEX benefits. As a best practice, stay aligned with two accounting standards bodies — the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).
Look for online tools that enhance the offer — For large enterprises, one value is to alleviate IT teams from low-ROI tasks like device lifecycle management. This feature can and should be incorporated into the vendor's online device management tools, as well. From the portal, for example, you should be able to track assets, serial numbers, and status of services contracts in an easy-to-use interface.
Align your device refresh strategy with contract renewals — Short contract terms may seem of value, but if your natural lifecycle for conference room devices is three or four years, align your HaaS program accordingly.
HaaS may not deliver a new technology or device feature. Still, it is an offer that can help address the concerns of other stakeholders — procurement, finance, and facilities, for example — involved in decisions related to UC strategies. Remember, you’re not just buying devices, you're buying a solution.
