The concept of hardware-as-a-service has been around now for well over a decade. But now that software-as-a-service (SaaS) applications have become a primary method of consuming IT, many organizations are now thinking about applying the same operating expense model to how they acquire endpoints and the software that runs on them. To make it simpler for solution providers to provide that capability to their customers, Tech Data has launched Tech-as-a-Service (TaaS), a program through which solution providers can now finance the delivery of endpoints as a service to their customers.
Linda Rendleman, vice president of marketing for endpoint solutions at Tech Data, says TaaS is designed to pay solution providers upfront for all the endpoint hardware and software they sell. That approach allows the solution provider to maintain a healthy balance sheet while charging the customer a monthly subscription fee for consuming the endpoints they deliver as a service to their end customer, says Rendleman.
“This allows our partners to align with how more customers want to buy,” says Rendelman.
TaaS is not the first such service offered to solution providers, But Rendleman notes that often other programs that enable endpoints to be sold as a service are tied to a specific hardware or software vendor. Most solution providers are required to sell multiple types of endpoints to customers from different manufacturers because different types of end users prefer different classes of devices. For example, a sales team may want a tablet, while engineering teams require a high-end PC. Rendleman also notes that many organizations prefer not to get locked into a single vendor, which can be especially problematic when any component on which a manufacturer depends is in short supply, or they encounter quality control issues.
Tech Data is now able to provide this capability because of financing terms with DLL, a financial services company headquartered in the Netherlands. Additionally, Rendleman says Tech Data is also employing some the platform capabilities and technology expertise it gained via the recent acquisition of Technology Solutions arm of Avnet to make TaaS available.
The single most significant benefit of TaaS from a partner perspective may be that it will encourage customers to refresh endpoints more frequently. Although tax laws have recently changed, there’s still a tendency for customers to wait to upgrade systems when using their capital merely because they have so many competing priorities. When endpoints are consumed as a service a more consistent approach to updating technology over a multi-year contract is usually included.
It’s too early to know how many customers will shift to consuming endpoints as a service. Rendleman notes that TaaS right now is limited to midmarket customers willing to invest a minimum of $10,000 in a subscription service. That requirement may go lower in the future to address small business opportunities. But for now, the primary TaaS focus will be on organizations that have a big enough operating budget to make financing a subscription service financially worthwhile to all concerned.