2 growing trends that make DaaS even more desirable
More and more organizations are adopting Device as a Service (DaaS) to simplify their IT purchasing, keep their devices up to date, and take advantage of switching from capital expenses (capex) to operating expenses (opex).
DaaS already has many benefits. Two recent developments add to the list. Whether you’ve been considering DaaS or have already implemented it, take note of these two trends that are making the service even more attractive to some organizations.
DaaS will soon include software
DaaS discussions usually revolve around client devices, services, asset recovery, configuration, and outside support. Now there are plans to add a new element to the offering: software.
Software with perpetual licensing and a locked-in price can be combined with hardware and other services, giving organizations a complete package all bundled into one monthly opex.
Cloud Solution Provider (CSP) licensing for Office 365 is one example. The pricing for Office 365 doesn’t change from Year 1 to Year 3. Plus, subscription licenses like Office 365 can be used across platforms, including on Apple, Windows, or Google devices.
Including subscription licenses in the DaaS model ensures you can re-evaluate your hardware, software, and services in tandem every two to three years, depending on your refresh cycle. That way you can ensure you’re always using the latest devices and software, and that they fit your organization’s specific use cases.
DaaS aids compliance and accounting
Beginning December 15, 2018, new accounting standards took effect for public companies around leasing. Private companies, nonprofits, and other entities have an extra year before they have to comply – though they are free to adopt the new standards early.
The Financial Accounting Standards Board (FASB) constantly releases accounting standards updates to promote transparency and ensure organizations provide useful financial reporting.
The FASB’s Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) “establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases.”
- Eliminates one of the largest sources of off-balance sheet financing
- Improves comparability
- Better reflects the financial position of the lessee
- Reduces opportunities to structure to obtain a reporting outcome
- Addresses practice issues for preparers
What does all that have to do with DaaS? By bundling hardware, software, and services that are billed monthly as an opex, organizations can better predict IT spending and more easily comply with the accounting changes. You don’t need to worry about separating services from the leased devices, as the new rules might require, because it’s all a single line item as DaaS.
The future is DaaS
Not every company has the resources available to properly image, manage, deploy, and support their devices. With DaaS, these needs are taken out of your hands, bundled together, and moved into a managed service.
This model simplifies the IT procurement process. Capex becomes opex, devices are always up to date because of defined refresh cycles, and organizations have the flexibility to offer different devices to different departments to best fit their business needs.
With the addition of software licensing as well as the recent accounting changes, interest in DaaS should only grow.
To learn more about the benefits of DaaS and to see if it’s the right model for your organization, contact your SHI account executive.
Joe Avila contributed to this post.