How does Device-as-a-Service (DaaS) differ from leasing?

With technology changing fast and budgets always under pressure, it’s no surprise that many organisations are looking for flexible ways to source and manage their technology.

At first glance, Device-as-a-Service (DaaS) and leasing might look the same. After all, they both provide a mechanism for acquiring technology while smoothing out costs over time. However, they have radically different perspectives. Understanding them will help you choose the right model for you.

What is a lease?

A lease is focused on financing hardware. Under a lease agreement, you acquire an asset, such as a computer, and pay for it over time. Lease agreements are always capital expenditure and are reflected as such on your balance sheet.

With a lease, you would keep the responsibility for managing and maintaining the device, or would need to sign a separate outsourcing agreement for someone else to do that for you.

What is DaaS?

Whereas the core of a lease is hardware, the heart of DaaS is a service. DaaS goes beyond making a device available and delivers an outcome or capability, such as a working, supported computer. The focus is on delivering outcomes based on service level agreements and key performance indicators.

You pay a predictable monthly fee, which covers not just the hardware but also services such as support, maintenance, and security management. Your DaaS provider is responsible for the device from procurement to retirement.

What are the advantages of DaaS?

DaaS is attractive for a number of reasons. The Chief Financial Officer might relish the opportunity to cut the total cost of ownership and balance capital expenditure with operational expenditure. Using DaaS, hardware, software, and services fall under a single payment as an operating expense for the life of the contract. NSC Global works with a number of tier-one global funding providers, which enables us to cater for even the largest DaaS deployments.

Meanwhile, the Chief Technology Officer might want to specify the technology without carrying the responsibility for repairs and maintenance, and without having to juggle multiple suppliers. It’s easier to appoint a single supplier that is responsible for both supplying the technology and keeping it running. It’s often more efficient and more cost-effective to use external resources than internal teams for day-to-day IT management, too.

In some cases, you may be able to refresh or upgrade devices during the term of a DaaS contract, with the DaaS provider refurbishing unneeded devices for resale. A three-year-old computer that is no longer adequate for a power user might suit an administrator’s needs, for example. By way of contrast, a lease usually ties you in to all the monthly payments for the contract’s duration.

DaaS and leasing: head to head

Either model might be the best fit for you, depending on your business objectives and priorities. Here’s a comparison table to help you choose:

Conclusion

More and more companies are choosing DaaS because it frees them up to focus on their core business. Their experience with DaaS is that the technology simply works without them having to worry about it. It is fully maintained, including security updates, and there’s support available when they need some extra help.

DaaS helps to reduce total cost of ownership and simplify IT operations, while smoothing out expenditure.

Find out more about DaaS by NSC Global.

NSC Global