Software-as-a-Service (SaaS) contracts are now the norm. Businesses love paying a low monthly subscription fee to never have to buy, install, configure, upgrade, and patch their critical applications.
You can get the same convenience with your IT hardware, such as AIDC mobile computers and POS systems. Hardware-as-a-Service (HaaS) agreements can provide the same peace of mind and convenience as SaaS. For a low monthly subscription fee, you can always have up-to-date technology and a worry-free service agreement.
If you’re struggling with aging or out-of-date technology, or your business is growing, and your equipment needs are growing with it, HaaS may provide you with an attractive opportunity to upgrade or add equipment. In addition, if your ability to fund equipment purchases as a capital expenditure is challenged, HaaS enables you to pay for hardware as an operating expense. HaaS also helps companies address the reality that IT hardware quickly becomes obsolete. Why own and dispose of aging technology when you can get automatic refreshes?
But before putting your signature on a HaaS agreement, be sure the contract supports your business, financial, and technology needs.
What Can Be Included in Your Hardware-as-a-Service Contract?
Your HaaS contract can include more than just hardware. Many IT finance companies allow you to bundle hardware, software, and services into one fixed monthly payment. Typically, you can include several services in the contract, including installation, training, monitoring, and ongoing maintenance.
While choosing rugged, mobile devices, and other hardware with the right characteristics, is crucial to serving your customers, it’s also important to clearly understand the technical support and warranties for the IT equipment you are purchasing.
How is Your IT Equipment Purchase Supported?
When it comes to packaging services under an HaaS agreement, it’s critical to understand the level of technical support that’s included with the hardware purchase. A good HaaS contract should include everything you need to get as much of the support burden off your plate as possible.
Manufacturer warranties are key. Generally, you’ll want warranty coverage of some kind that covers the equipment’s expected useful life. If the warranty expires before your equipment, you may be stuck with a big support burden. In addition, you’ll want clarity on these critical manufacturer support issues:
- Will the manufacturer provide support by phone?
- Does the manufacturer provide onsite repair, depot repair, or both?
- Does the manufacturer offer preventative maintenance programs to help reduce downtime?
- What are the manufacturer’s stated response times for handling IT hardware issues?
- What’s the manufacturer’s policy or program for equipment upgrades and refreshes? And is your company eligible for the program?
Who Owns the IT Hardware?
HaaS contracts can be lease agreements or purchase agreements. Lease agreements generally feature lower monthly payments with the option to buy the equipment at the end of the contract. Avoiding ownership of equipment can be good for companies that expect regular hardware refreshes to stay competitive. You’ll never be in a position to own obsolete equipment.
On the other hand, if you were to switch to a new IT provider during the term of the lease, you may run into problems if your current vendor owns the equipment. In order to make the switch, you may be forced to buy the current equipment outright.
What Are the Payment Terms and Conditions?
Last, but not least, be clear about the payment terms and conditions. For example:
- How long do the monthly subscription fees last?
- Does the contract automatically renew after the initial term?
- Are there set-up or go-live fees to configure and install the equipment?
- Is there an early termination fee?
- Are there any other fees or penalties?
How Do I Stay Competitive and Avoid Disruptions?
HaaS allows you to stay competitive with easy terms to buy and use hardware, but only as long as you read and understand the fine print.
Make sure your HaaS contract supports your business needs and goals. Before signing an agreement, thoroughly review and understand the terms to ensure you won’t be stuck with obsolete equipment at the end of the term, pay unexpected fees during the contract term, or sign a contract that may lead to business disruptions.
Because when it comes to HaaS contracts, the devil is in the details.