The high residual cost of Apple devices make them a perfect fit for a Device as a Service model, argues Jigsaw24's Tariq Saied
According to BMO Capital Markets analyst Tim Long, in March 2017there were well over 700 million iPhones in use across the globe. 715 million to be precise; a staggering figure by anyone's standards. Apple of course doesn't just make phones. Across the world, sales of Mac, iPads and other consumer devices are growin at an extraordinary rate.
For businesses however, Apple can be perceived to be an expensive proposition as a workplace technology. They may be the number one choice for creative companies and their employees, as well as offering greater stability, performance and security than their counterparts, but the cost of Apple products can be a barrier for some, despite being comparable to most high-end PCs. This can be challenging for Apple resellers, like us, when targeting potential customers, so how can they encourage businesses to invest in Apple?
Driving down costs with DaaS
When it comes to procuring new technology, or refreshing their existing estate, businesses have long used leasing and finance arrangements as a means of protecting cash flow, or enjoying the savings typically offered when buying a number of devices outright Businesses today, however, are increasingly seeking to include warranty, support and, in some cases, accidental damage cover as part of their agreements, which has led to the birth of ‘Device-as-a-Service' or DaaS, which provides a fixed cost per device over the term.
DaaS is typically subscription-based with businesses paying a fixed cost per user per month, based on the combined cost of the device and the additional products and services. After an agreed term, they can either carry on with the agreement or refresh the device. Support and security costs will be covered by a central help desk with more risk-averse businesses adding a level of accidental damage cover to their lease.
Although the end-user will never own the device unless they buy it outright, one of the main attractions of DaaS is the cost efficiency it represents, allowing businesses to take advantage of predictable monthly expenditure, as well as removing the need for significant up-front investment in expensive hardware.
As Megan Williams of Forbes notes: "DaaS reinvents and simplifies device acquisition and deployment by combining devices (including mobile, PC, and workstation), packaging them under one point of contact, adding the expertise needed to manage those devices, and attaching them all to a single contract. The result? Reduced complexity, added services, and an optimized system."
The argument for Apple
Apple products in particular deliver a number of benefits when bought through a DaaS arrangement.
DaaS can deliver significant savings when it comes to Apple hardware for example, equalising the monthly cost of a device to that of a PC. The high residual cost of an Apple device means the lease cost is roughly the same as that of a device costing around half as much at retail. Under a DaaS arrangement, a £1,000 Mac will cost approximately the same per month as a £600 PC. The cost of support is lower too, with Apple devices generating only around half the number of incidents of an equivalent PC environment. As well as proving cost-effective for businesses, the longer lifecycle of an Apple device also means longer recurring revenues for resellers, and the ease with which it is possible to scale up and down with Apple makes the onboarding and exiting of devices considerably easier.
What's more, Apple's device enrolment programme offers significant security benefits. From the moment an Apple device leaves the warehouse, it is the property of a specific user and is only able to enrol and run as that company's device. Should it be subsequently stolen, it will not function under any other environment, rendering it entirely worthless.
This is, of course, music to a reseller's ears when they are attempting to boost sales of Apple products. DaaS offers them the ability to package a suite of services, and make these available through a leasing or finance model on terms which will appeal to companies looking to offer Apple devices to their users. By offering a cost-effective, secure and efficient solution via DaaS, resellers can make Apple a much more attractive option to enterprises.
You can't expect a PC team to ‘learn Apple'
The opportunities for DaaS for Apple don't stop there. Apple will often be a new End User Compute (EUC) technology within an organisation, and this will need a support system to be implemented and integrated within the existing Service delivery model. The support and management opportunity affords businesses a low cost support model that includes support services alongside the device and warranty, and represents only an additional £5 to £10 per user per month as part of a Daas offering.
Managing an Apple estate requires specific disciplines; an organisation can't expect its PC team to ‘learn Apple'. Given this, any organisation considering using DaaS to introduce Apple devices to its IT estate should do so with an Apple Authorised Enterprise Reseller, whose team understands the technologies an enterprise customer uses, and can therefore customise an arrangement to meet the specific requirements of an individual business.
DaaS is yet to fully take off, although analysts predict that, by 2020, nearly a third of commercial PCs shipped in the US will go through a DaaS agreement. The benefits to businesses are clear, particularly when it comes to Apple hardware. Being fully aware of all and any ongoing costs, forward-thinking organisations can enjoy peace-of-mind as they seamlessly roll out the latest iteration of Apple's high-spec technology to their workforce. The benefits to resellers are clear too, enabling them to package and promote a traditionally high-end proposition, while enjoying greater recurring revenues and lower service and support costs.
Tariq Saied is CTO of Jigsaw24
