Dell hails boom in demand for hardware-as-a-service

Dell Financial Services claims consumer phone contract-style deals are becoming more popular

Dell Financial Services (DFS) has said more customers are demanding "hardware-as-a-service" finance offerings, similar to that of a consumer mobile phone contract.

The finance arm of Dell has provided similar offerings to customers on a bespoke basis in the past, but says they are becoming so popular that it is working out a way to make a formal programme around it.

DFS claims the hardware-as-a-service model involves charging customers monthly for a device and associated services such as data transfer and deployment, rather than selling the products outright and offering services on top.

"Customers are moving from not just wanting to buy a PC, but wanting associated services and support around it," Alan Petters, director of DFS, told CRN.

"We are developing a product which will allow customers to take a client device with upgraded warranty, they can build in deployment costs, a service provider will come in and do the data transfer and deployment, and we will build in return logistics at the end of the contract. They know they are going to get not just the use of the PC, but the range of services. They pay on a per-month, per-asset basis. We're seeing a big increase in that demand from customers for that type of product."

Petters said that the hardware-as-a-service model is becoming increasingly popular among certain customers, particularly construction firms.

The as-a-service model is not new in the enterprise space, but normally refers to newer, cloud-based offerings. However, in the consumer space, mobile phone contracts have operated in this way for years. Just last week, Microsoft announced its Surface-as-a-service offering, enabling authorised partners to sell its tablet devices in this way.

Petter said more formal hardware-as-a-service finance offerings are in the pipeline at DFS.

"We've offered it to a number of customers on a bespoke basis," he said. "We've realised that this is where customers want us to go so we are trying to productise it and 'programmatise' it - if there is such a word - so it is a more off-the-shelf type solution for customers. To date, we've done it on an ad hoc, bespoke basis for customers. We've been successful and for some reason in the UK, we do this for a number of large construction companies. I don't know why, but it suits them very well.

"With a phone contract, you get X amount of data, Y amount of calls and Z amount of texts. You pay a fixed fee for that, and if you go above it, you get some more. Amazon, Google and Microsoft with Azure - they are getting the world used to pay-as-you-consume."

Gavin McLoughlin, director at GEM Messaging, which works with vendors on their go-to-market, said that economic uncertainty, particularly following Brexit, might encourage customers to go for a hardware-as-a-service model.

"There is a lot of uncertainty about the economy because of Brexit and there's a lot of uncertainty about technology," he said. "In the past, that just meant delayed decisions. I have lost count of the amount of times over the years I have gone into a company to talk about technology and they've said 'it's good but we want to see what happens in the next six months and if the market changes'.

"If you're using what people are calling hardware-as-a-service, you're equipped [for that]. It's like a flexible car lease - it is easier than paying cash."