Although the device-as-a-service (DaaS) model isn’t brand new, the impact of a global pandemic has helped shine a spotlight on it. Nowadays, DaaS is being driven into businesses of all sizes and, in turn, is accelerating the acceptance of the “as-as-service” model as a whole.

Indeed, we’re rapidly advancing to a point where DaaS may solve a variety of COVID-19 related business challenges —the need to address a remote workforce, outfit employees quickly, and reduce capital, to name just a few.

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Ready or not…  businesses respond to the pandemic 

When COVID-19 and the ensuing lockdown measures hit, the standard 9-5 workday took a wallop as well.      

With many businesses being forced to roll out online tools and services to a 100% distributed workforce posthaste, the as-a-service model got a lot more interesting. As office buildings closed their doors and the world went into lockdown, the ability to support remote workers and fulfill technology needs from the cloud wasn’t just attractive, it was essential. 

The market and consumer data company Statista reported in October 2020 that since April, the number of Microsoft Teams daily users has increased by 75 million. From March to April, Cisco WebEx meeting minutes increased by more than 11 billion.  Illustrating the willingness of companies to accelerate their adoption of non-traditional IT solutions to serve their organizations while avoiding large CapEx expenditures.

Making lemonade from the lockdown

As enterprises are scrambling to adjust and find equilibrium, IT vendors can find opportunity amidst the “new normal” that’s being created in response to the pandemic.

DaaS is undoubtedly at the core of most hardware vendor’s efforts to build as-a-service offerings that not only meet customer needs to reduce CapEx but compete with the flexibility and scalability of cloud offerings. Devices serve as a great as-a-service starting point for IT vendors, and it’s rapidly evolving from merely a hardware play. Especially now with the explosion of work from anywhere.

More and more, enterprises are looking for vendors who can offer not just devices or individual services, but also business outcomes. As a result, vendor offerings need to be re-thought to meet these new expectations. Specifically, vendors must find ways to increase their value by building additional intelligence and even personalized services around their offering portfolios.

Successful DaaS offerings are emerging across markets 

The Enterprise IT landscape

For enterprise IT vendors, the uptick in cloud adoption due to COVID is prescriptive. The broader acceptance of as-a-service models signals that organizations are increasingly willing to offload IT CapEx and the technology management that comes with it. Successful DaaS offerings will evolve toward providing an increasingly cloud-like experience for deployments, management, and end-user experience.

The evolution from DaaS to Everything-as-a-Service (EaaS), where the device is offered with richer sets of technologies, tools and services, is also taking hold for IT vendors. That’s because vendors are recognizing that to compete with public cloud they need to provide features that are as good or better. For instance, using capacity monitoring managed services and hardware delivery SLAs to mimic the speed and deployment available in public cloud.

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28.3%

In 3rd quarter of 2020, notebook and mobile workstations shipments increased compared to a year ago.

 

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PC-as-a-service gets a boost

Despite COVID-related supply chain and availability concerns in early 2020, the PC vendor market in general has shown growth. Analyst firm Canalys reported that worldwide notebook and mobile workstation shipments in the third quarter were 28.3% higher than a year ago, helping push overall PC shipments up 12.7% year on year to 79.2 million units.

Not surprisingly, the COVID-induced move to a remote workforce has resulted in more growth from laptops and notebooks than desktop units.

Capitalizing on this growth with an as-a-service model, however, is a work in progress. And, IT vendors are actively lowering the barrier to entry. For example, Dell Technologies On-Demand is offering one-year contract options instead of the typical three- to five-year options. Dell is also making more money available for financing. Lenovo, meanwhile, is making it easier to transition PC purchases to as-a-service contracts, offering cash up front for a customer’s equipment while transitioning them to an as-a-service plan.

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6% to 15%

Smartphone shipments in 2020 declined due to a highly saturated marketplace.

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Smartphone market reacts to services, not hardware

The smartphone market, from a purely hardware perspective, is taking its lumps from COVID. In what was already becoming a highly saturated marketplace, new shipments are predicted to decline 6% to 15% in 2020. Fortunately, the as-a-service model could be this market’s life raft, as it’s expected to grow from $14.5 billion in 2019 to $34.1 billion in 2024.

Why thinking beyond the device makes smart business sense

The beauty of DaaS and the inevitable path to Everything-as-a-Service (EaaS) is its ability to impact the entire technology ecosystem. It’s much larger than a device. To find success with EaaS, vendors need to holistically rethink their value chain — including partner relationships — to deliver the performance and financial flexibility customers need.

Technology Business Research, Inc. believes Enterprise IT DaaS adoption is the first step toward this transformation, as vendors develop offerings and educate customers. To compete with cloud services, EaaS needs both flexible consumption-based pricing and the flexibility, simplification, and automation of systems providing a cloud-like experience. As a result, IT vendors will want to focus on the following:

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Strong relationships

AaS offers advantages in brand loyalty and customer service leading to opportunities for third-party software services and solutions resulting in familiarity with clients that exceed hyper-scalers.  

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Education

Customers need time to embrace pre-configured, complete solutions. It’s not easy to switch to aaS models and as the market matures, vendors must continue to enhance offerings to be more attractive.

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Competitive pricing

Smartphone’s ability to maintain value for used devices helps vendors stay competitive without depreciation of devices sold under DaaS allowing vendors to rethink their product, platform and service.

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Bottom line: While we won’t know the full impact of COVID-19 until we’re on the other side of it, even if a global recession decreases demand in some areas of the industry, the DaaS to EaaS model presents an increasingly viable business model for IT vendors. 

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. This document refers to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied.

Kevin Dobbs

Managing Director – Accenture Consulting


Andrew Chamaj

Senior Manager – Accenture Strategy

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