In the past 20 years, businesses have adopted a range of innovations, especially regarding technology. But with COVID-19, the need for technology to be a competitive business advantage has increased overnight, and technology transformations have become increasingly important. Technology has become a critical business capability, whether it is the shift to working from home, the increase in digitalisation, or the proliferation of cyber-attacks.
With digital transformation, no part of the business is left untouched. New technology is quickly replacing old legacy systems, improving existing work processes, and bringing businesses to an era of increased accessibility, productivity, and efficiency.
Besides giving them the ability to benefit from improved workflows and greater business insights, these changes have made businesses focus on equipping their now remote workforce with access to cloud-centric applications.
This created the need to alter the traditional supply chain of IT devices as businesses had to secure and distribute the devices and, simultaneously, reduce their technical debt in a period of consolidated revenue.
The solution? Device-as-a-Service model, a variant of product-as-a-service, or shortly DaaS quickly emerged as a solution to that challenge.
With the Device-as-a-Service model, businesses can manage their hardware upgrades and give their employees access to the applications they need more quickly and easily. This way, their employees can take full advantage of their cloud services which, in turn, increases transparency and improves the predictability of associated costs.
What is Device-as-a-Service?
Device-as-a-Service is a model where customers can get their hands on computers, smartphones and other types of mobile computing devices as a paid service. DaaS simplifies customers' needs by allowing them to use the device without worrying about device management. This way, customers can update their devices at the end of the subscription period without the costs that are normally associated with device refresh.
Device management typically covers both hardware and software and includes services such as device backups, asset tracking, and end-of-life disposal. Device-as-a-Service example devices include hardware such as laptops, desktop PCs, tablets, and smartphones.
Here, the vendors or manufacturers provide a subscription contract that defines hardware, software, duration of the subscription, cost, and any additional services the customer wants.
The payment is usually on a per-device basis. The devices often come with the preinstalled software that the customer needs and have a defined method for installing upgrades and bug fixes.
Three dimensions of the DaaS Supply Chain
Device-as-a-Service changes the complexity of data and flow of the supply chain as device providers have to integrate several phases of “Source, Make, Deliver” across different possible cycles of device deployment. There are three different dimensions of DaaS:
Device fulfilment requires the provider to carefully consider and decide how the devices will be delivered to the customers. In the Device-as-a-Service example, the fulfilment is not based on the usual order-based model.
Device services, as well as all connected processes, need to be both thoroughly defined and simple to follow, which is not frequent in the case of add-on service models. With DaaS, device providers must have an in-depth understanding of the device and all its components. They also need to know how the device will behave (and change) as time passes.
Device recovery allows providers to improve their device revenue by getting additional value through reverse logistics, device refurbishment, and redeployment to new customers. This dimension is basically unique to Device-as-a-Service since it is nothing more than an afterthought in most product distribution models.
How to Get Started with DaaS?
Device-as-a-Service is becoming a prevalent and desirable option for both businesses and their customers. With DaaS, businesses get a new and more predictable revenue stream.
Besides lowering their warranty costs, businesses can significantly reduce their sourcing costs now that they can redeploy the devices after the initial subscription is finished and the devices are refurbished.
Customers, on the other hand, gain flexibility and reduced costs. They are also free from most responsibilities related to managing the device.
However, starting with a Device-as-a-Service model can be both rewarding and challenging for businesses.
DaaS requires businesses to adopt a new supply chain model. This supply chain consists of device fulfilment, device services, and device recovery which are integrated in a continuous flow. Only this way, customers will have a seamless end-to-end customer experience.
Difference between DaaS and leasing model
Although it is often confused with a leasing model, the Device-as-a-Service model is, in reality, very different.
In a leasing model, services are add-ons that are usually managed through customer portals or other businesses. Furthermore, there is an initial device shipment process and a certain disconnect between the processes and relevant data. This disconnect causes the need to obtain additional information from the customer in each transaction.
In other words, each interaction with the customer (fulfilment, service, and return) is often a completely different experience which paints the provider as disorganised and leaves customers feeling frustrated.
On the other hand, DaaS model provides the customer with the same smooth experience, whether it is fulfilment, service, or recovery. This is possible because Device-as-a-Service model has connected processes and draws customer data and assets from a single source, enabling providers to save time and resources while providing their customers with an ultimate customer experience.
Three steps to start with Device-as-a-Service
The popularity of DaaS is on the increase among both customers and device manufacturers/vendors. Businesses that want to create a seamless DaaS experience for their customers have to take three initial steps.
3. Setup a DaaS model in which all available offers create measurable external and internal value across all three DaaS dimensions mentioned above.
In cases where one or more dimensions are not creating value, the whole DaaS model will not be sustainable. A successful Device-as-a-Service example is created in a way that uses proven value models and considers the device from cradle to grave. In other words, it includes all of the organisation's physical, information, and financial transactions from the very beginning of a product or service to its disposal.
2. Clarify business goals and assign relevant people for every element of the DaaS model.
Since having distributed accountability in complex integrations can stall actions, having a single organisation and leadership that will drive accountability and ensure success is very important for businesses that want only the best for their new Device-as-a-Service model.
3. Conduct a high-level benchmark of your planned DaaS integration, capability, and scalability.
The most successful Device as a Service examples all have platforms that are thoroughly architected in order to drive value fast and, at the same time, keep their scalability and depth.
What are some examples of Device-as-a-Service?
HP's device-as-a-service business model can help businesses save on costs associated with remote working, security, and digital transformation. The monthly payment plan is flexible and can be optimized to help the business cash flow.
With this service, customers can also access software that helps manage their devices remotely. This can include monitoring device health and performance, setting up security policies, and managing apps and updates.
Another example is Grover. Grover's mission is to democratize access to consumer tech and bring the circular economy for electronics to new countries. Grover will accelerate its mission and expand its operations in existing markets—Germany, Austria, Spain, the Netherlands, and the USA—with its latest funding success. It is Grover's goal to continue providing access to consumer tech and growing subscribers in existing markets. The company has ambitious plans to expand its consumer tech subscription and has forever altered how the consumer electronics industry does business.
Germany's Samsung Electronics partnered with Grover to bring monthly tech subscriptions to Samsung customers. Grover will now offer Galaxy S20 smartphones for rent through Samsung's online shop in Germany.
This new partnership between Grover and Samsung is designed to give German consumers more flexible and affordable access to the latest smartphone technology. With Grover, customers can choose to rent a Galaxy S20 for 12 or 24 months, with the option to upgrade to a newer model after 12 months.
On the same vein, Apple is coming up with its own hardware-as-a-service. This program would allow customers to subscribe to hardware with the same Apple ID and App Store account they use today to buy apps and subscribe to services. In doing so, Apple would make buying an iPhone or iPad as seamless as paying for iCloud storage or an Apple Music subscription each month.
How to identify the right DaaS Provider?
If a business decides that they want to implement a device-as-a-service model, its best chance of success is to find a provider instead of reinventing the wheel. To build a DaaS platform requires custom development, such as setting up and staffing (or outsourcing) a whole development team, which takes considerable time and resources.
circuly allows businesses to launch and scale their DaaS subscription business within months. It provides customers a seamless customer-centric renting experience by empowering businesses with an all-in-one platform to manage their new business model, from subscription management, recurring billing, and asset tracking to return handling.
According to the device-as-a-service Market Research Report conducted by Market Research Future, DaaS market size can touch a value of USD 307.42 Billion by 2030 which is a staggering increase considering that it stood at USD 9,843.8 million in 2019.
Conclusively, device-as-a-service is gaining momentum because both businesses and customers want to make things as easy as possible for themselves. Most customers really only care about the service and not the device itself, meaning that if the device breaks, they simply want it replaced. Furthermore, customers want to have the option of trying the device before purchasing it, and they want to pay as they go. And this is where both the flexibility and value of the Device as a Service model comes to play.
For businesses on the other hand, the focus is shifting from delivering digital workplace experiences with high degrees of automation towards enhancing their workplace delivery and productivity capabilities. The reality is that the actual devices are starting to matter less and less, and the innovations related to the quality of value-added services are becoming increasingly important. And this is exactly where Device as a Service comes to play, as it serves as a source for differentiation and competitive advantage for businesses in the device industry.