The Hardware as a Service (HaaS) market is set for dramatic growth. Transparency Market Research predicts the market will increase from $40.88 billion in 2017 to $305 billion in 2026, an impressive CAGR of 25.6 percent. Transparency points out that North America will lead with the most significant contribution toward that growth.
Why Businesses Are Subscribing Rather Than Buying
Numerous factors are driving that growth. With the HaaS model, end users don’t purchase IT hardware. Instead, they pay a monthly fee for hardware maintenance, service and support by a managed services provider (MSP). Through a service level agreement (SLA), both parties agree to how quickly the provider will respond so that end users can ensure the uptime and performance they require for their operation type. Businesses also benefit by not employing in-house IT resources to maintain their computers, scanners, printers or other devices.
Haas also offers end users additional benefits. HaaS enables businesses to use up-to-date solutions without making a capital expenditure. Instead, IT becomes an OPEX, allowing a company to maintain its cash reserves and provide tax benefits and a higher credit rating.
Verticals Contributing to Hardware as a Service Market Growth
Several vertical markets have been the mainstay of HaaS provider businesses. Banking, financial services and insurance (BFSI) often choose to subscribe to a Hardware as a Service offering for IT hardware, which gives these businesses greater agility to upgrade when tech disruption drives change. Schools and universities have also leveraged HaaS for their IT needs, including tablet deployments that students use, and telecom providers often provide phones and other devices via Hardware as a Service. With two- or three-year HaaS contracts, the customer can upgrade technology, if needed, every few years, rather than waiting for ROI from a CAPEX while competitors are moving ahead.
While those continue to represent opportunities, analysts also see new business emerging in:
Construction. Businesses in the construction industry can experience highs and lows in revenues due to seasonal changes or gaps between contracts. The industry’s nature makes HaaS appealing because it enables teams to have the computers and devices they need without requiring an outright purchase of hardware that the business may not need in a few months.
Government. Different processes instituted in 2020, such as call centers vs. in-person services, remote work, and other policing approaches, have increased reliance on IT and may create an opportunity for HaaS sales.
HaaS providers may also find opportunities among companies that are continuing to operate through a work from home (WFH) model and want to ensure their employees perform their jobs as securely and efficiently as possible with company-provided computers and devices.
Currently, large enterprises represent most of the HaaS market, especially if they require on-premises printers that process a high volume of documents. However, small and medium-sized businesses (SMBs) may turn to HaaS in higher numbers in the coming years, especially to complement Desktop as a Service (DaaS) for their WFH employees.
Greater Awareness is Also Driving Growth
Through research for its Global Hardware as a Service Market Report 2020, AMA Research and Media found that awareness of HaaS among end users is also creating opportunities. With more businesses aware that HaaS is an option and how it works, it’s easier for you to communicate your offerings’ value and how service and support differentiate them from leasing alone.
With this greater awareness, businesses are also beginning to change their perspective on IT. They’re rethinking the value of owning IT hardware assets and exploring whether migrating to HaaS solutions can get them to the same ends more cost-effectively and efficiently — and without the headache of decommissioning hardware at its end of life.
The Hardware as a Service market may also be growing due to MSPs’ awareness of programs through distributors and funding options that help them tailor solutions to your clients and minimize your risk. Moreover, you may be able to continue to sell the solutions you currently provide under this new model and expand your business.
The market is poised for growth — is your business ready as well?