Why Hardware as a Service Is an Untapped Opportunity for MSPs

By Rachel Rothwell

Rachel Rothwell

After businesses were forced to close their offices and move to remote working models in 2020, the need for tangible and concrete property was replaced by the need for accessible and adaptable services to suit these extraordinary circumstances. As a result of the shifting business demands, hardware as a service (HaaS) has become an increasingly lucrative market over the past 18 months.

HaaS is a pay-as-you-go model whereby customers pay their managed service providers a monthly fee for a bundled hardware, software and maintenance service. The model has become widely popular among small- and medium-sized businesses during the pandemic, as it has allowed them to provide their employees with fully integrated services, accessible remotely from the comfort and safety of their homes. Forecasters predict that the global HaaS market will be worth upward of £218 billion by 2027, demonstrating that demand for this model isn’t going anywhere anytime soon. Despite the growing appetite from customers and the significant financial incentive, many MSPs remain skeptical, but those dragging their feet on HaaS will get left behind.

Strengthening Customer Relationships

Needless to say, many SMBs have taken a hard financial hit as a result of the pandemic. But after an incredibly turbulent 18 months, some are beginning to transition out of recovery mode and are now turning to solutions that will allow them to closely monitor their budgets as they cautiously look to expand.

One of the primary benefits of a monthly payment service like HaaS is that customers can avoid the high upfront cost of hardware, as well as the additional cost of servicing and licensing fees. The subscription-style plan means that businesses can monitor and forecast their outgoings month on month, allowing them to balance their budgets more effectively. By offering a service like HaaS, MSPs can demonstrate to their customers that they understand the wants and needs of their customers, and that they are willing to adapt their offering in order to deliver the most suitable service for them. HaaS is clearly a service that SMBs desire and if their current MSP doesn’t provide the service, they’ll simply find an alternate service provider that does.

Benefits of Cloud-Based Services

By its very nature, HaaS allows MSPs to provide not just a product, but a critical customer service. In the past, one of the largest issues facing MSPs was customer loyalty. If a product malfunctioned, a service provider would be forced to begin a lengthy and costly process to resolve the issue, which is, understandably, very frustrating for customers. However, with the cloud-based HaaS solutions now on offer, MSPs can act more proactively by monitoring and solving any problems remotely in real time, before the customer even has time to notice. As a result of this convenient solution, 47% of businesses that use HaaS have said that the model has streamlined and improved the troubleshooting and support provided to them by their MSPs.

Cloud-based services aren’t just beneficial for streamlining purposes. Industry forecasters are now predicting that more than 45% of IT spending will move from traditional solutions to the cloud by 2024. MSPs must now capitalise on this trend and embrace integrated cloud-based services like HaaS as more businesses begin to recognise their importance and value.

Business Incentive for MSPs

While HaaS allows end customers to balance their budgets and receive a more streamlined and cohesive service, the model also enables MSPs to maximise their profits. In a typical MSP-customer relationship, businesses will enter into a yearly networking discussion with their service provider with a set budget in mind, often making it difficult for MSPs to upsell more advanced features and technologies. However, HaaS subscription-style models allow MSPs to adopt smoother upselling approaches due to a lower fee spread out over the longer-term deal structures that are associated with the model. By only paying a small monthly fee, customers are more likely to agree to a small price increase in exchange for access to a higher-quality solution. Ultimately, this creates a win-win situation where SMBs are paying smaller, more manageable fees and MSPs are able to guarantee larger revenue into the future.

Rachel Rothwell is regional director of UK & Western Europe at cloud networking solutions provider Zyxel Networks. She previously was Zyxel’s regional manager for Southern Europe, and has also worked as a product manager and business adviser. She is a graduate of Milton Keynes College. You may follow her on LinkedIn or @ZyxelUK on Twitter.