Simon Yates

Product Management Director

The importance of IT in the workplace – whether that’s the office or the kitchen table – has never been more pronounced than it is today.  The shift to greater levels of home working has highlighted the need for reliable devices that maximise employee productivity whilst mitigating overall risk.  But with workforces dispersed, the ability of the CTO/Head of IT to have a firm overview of the business’s IT liabilities can become increasingly tricky.

DaaS – or Device as a Service – offers a solution.  Often confused with equipment leasing, DaaS goes beyond the straight leasing of equipment by packaging the latest kit with extras that can include servicing/repair, security and asset tracking.

A study by Accenture found that in 2015, 0% of key PC manufacturers offered DaaS as an option, yet by 2019 this had grown to 65%.  I don’t doubt that in the past year it’s grown further.  And rightly so.  In a world where we’ve all become comfortable with Software as a Service (SaaS) and Cloud Computing, the notion of DaaS almost makes perfect sense.  ‘Almost’ because whilst the subscription models on which SaaS and Cloud Computing are hinged provide exactly what the user demands and improves their overall user experience – gone are the days of needing to locate a CD Rom to install software or experiencing panic as data storage runs out – they’re not based on a tangible asset.  And it’s very the existence of that tangible asset that poses the problem that is scuppering the ability of DaaS to realise its full potential.  Indeed, whilst the percentage of OEMs offering this model has increased markedly, it still only accounts for roughly 5% of the total market.

With that tangible asset, let’s say a laptop, comes a cost and a question of ultimate ownership.  Should this liability sit with the OEM?  With the reseller?  It surely can’t sit with the end user for whom the appeal of the DaaS model is hinged so centrally on the removal of a large capital investment upfront.

The reality is that in 90% of DaaS cases, the financial liability sits with a finance provider of some kind.  That could be part of the OEM organisation (with finance taken from the balance sheet at low rates to use), or otherwise as part of global distribution partnerships – either way, it remains a purely financial or banking transaction where the financer holds control on the parameters, inclusions, and flexibility – they do, after all, have the ownership!

Amongst the alternatives could be a shift to distributors or resellers owning the devices.  This would, however, require a fundamental modification of their business model and access to significant levels of cash – a single laptop cost of circa £700 is a considerable outlay.  Those with a legacy of operating in the managed print market are well placed to succeed in this respect: where they deal in ink, paper and the printer itself, now they can instead focus on data, software and a laptop.

In the world of SaaS, the providers are relatively few – Microsoft with Office; Adobe with Photoshop/Creative Cloud – and consequently, change driven by them sparks supported business model change in those who resell products.

In the devices market, however, there are many more providers – HP, Dell, Lenovo, Acer, Asus, Dynabook, Fujitsu to name a few – making the competitive risk of pushing for a business model change high.

So how does the market overcome this?  It might come down to those risk takers and innovators in distribution partners who are already managing cash flow and credit for resellers; or maybe telco providers who manage existing data contracts; it might even be time for a CPU or OS manufacturer to step in and really drive change.

And I don’t doubt that change is possible, it’s just a question of where in the ecosystem and with whom leading the charge?  What do you think?