Device as a Service Ripe for Takeoff
In 2015, the device-as-a-service (DaaS) market came into being, but since that time the pace of uptake has underperformed. The lack of enthusiasm for this opex purchase model, at a time when opex is gaining favor over capex for a growing number of IT purchases, is a bit of a head scratcher. The good news for channel partners is that there’s confidence among industry experts that DaaS will prevail.
Now, don’t confuse device as a service with desktop as a service. In desktop as a service, there’s no physical hardware involved, per se. Customers subscribe to a virtualized desktop that’s accessed through a terminal such as a thin client, PC, or even a phone or tablet. Basically, a customer rents out infrastructure in the form of a virtual desktop. Device as a service, on the other hand, allows customers to subscribe to a piece of hardware, or as DaaS evolves, a bundled offer.
“At the heart of it, device as a service is about hardware and the life-cycle services, such as deploy, maintain and dispose,” Linn Huang, research vice president at IDC, told Channel Futures.
You might also be wondering how DaaS differs from leasing.
The answer isn’t as straightforward as one would hope given that the DaaS market is still nascent and evolving. Additionally, there was the expectation around subscription — namely, that it was monthly, and at the end of a paid month, the subscription was done.
“Our expectation was that DaaS offers would unfold like that, but certainly people wouldn’t be trading in their PCs every month,” said Huang. “Generally, the PC life cycle is about four years [and three months], and so we thought that someone who signed on for device as a service, their plan wasn’t to get out of the DaaS contract but that their PCs would be turned in at a three-year cadence, or something to that effect.”
As it turns out, there is convergence in the DaaS market toward a three-year agreement; however, it did throw in a wrench — Is this a subscription? Is it truly as a service?
Huang contends that a key difference between leasing and DaaS is the contract: A lease requires signing a contract for a period of time and you’re on the hook for the duration of that lease. If you back out, there’s a penalty. In an as-a-service model, there’s a lot more flexibility written into the contract, and in the managed services market you’ll often see customized customer contracts. But leasing/finance companies such as DLL talk about DaaS.
So why isn’t there more wind in DaaS’ sails?
Well, for starters, there’s that confusion around the monthly subscription-model concept and where DaaS fit into that. That confusion, however, is slowly dissipating.
Vendors and distributors have been rallying around DaaS for several years. In 2015, HP talked out PC as a service, and was soon followed by other vendors, such as Lenovo, Dell, HP, and Microsoft. IBM has been doing device as a service for years in a customized capacity.
Distribution jumped in as well. Tech Data, for example, offers its own flavor of DaaS, calling it technology as a service (TaaS), which allows partners to …