Over the past decade, more and more IT products and services have moved to a cloud-based, as-a-Service delivery model. This move has transformed areas of IT such as network infrastructure and software product development. Business owners were given the opportunity to access and pay for just the amount of IT capacity they needed, a level of flexibility unheard of in the past.
And now the a-a-S model is having an impact outside of server rooms – all the way to the humble, yet vital, business IP phone. Recently, Polycom announced a new Device-as-a-Service (DaaS) offering that brings the financial and technology benefits to user desktops. Polycom’s DaaS is offered on a month-to-month basis (i.e. no large, up-front capital expense), providing customers the option to cancel, upgrade/and or return the phones at any time.
To learn more about this new DaaS offering, WorkSpace Today reached out to Chris Thorson, Senior Director of Product Marketing at Polycom.
1. What feedback were you hearing from the market (customers and partners) that led to this pilot program?
More and more customers were requesting that the Service Provider (SP) provide them with everything including the device on a monthly basis. This caused the SP’s to have to pay cash for the devices and collect back for them over the term of the contract. This obviously caused cash flow issues.
Also, in many cases, the SP’s were “giving” away the phones to get the service which was negatively impacting margins. SP’s were stuck with phones if a customer cancelled.
Customers told us that they want greater flexibility and control while still keeping up to date on their phone technology. Our new DaaS model takes the entire lifecycle into account, from equipment deployment to end-of-life, and removes the onus on both business owners and service providers to keep devices current as new models come out.”
- This sounds like a simpler way to buy phones. What are some other benefits customers will get from the Device-as-a-Service buying structure?
It allows the SP to provide their customers with everything including a device for no upfront costs. They become a one stop shop for their customers, and can differentiate themselves from competitors.
For business customers, they can more easily upgrade to the latest technology and continue making a simple, transparent monthly payment.
- Is acquiring phones as a capital expense versus this DaaS model a decision typically made by finance? IT? or a collaboration between those (and other?) departments?
Of course every organization runs a bit differently, but typically it is a collaboration between IT and finance to determine the best option. In smaller organizations the decision more likely rests with the finance department as every expense runs through them.
The larger the company, the more likely it is that the IT organization will have more autonomy making the purchase decision. As an overall generalization, we are seeing organizations more open to as a service models today than ever before.
- Not all DaaS telephone programs are the same. What should an organization look for when considering providers and devices?
Most DaaS programs are simply leases that lock in a service provider for a specified term without the option to turn in the product if a customer cancels. Think of this like your personal mobile phone plan or your monthly cable bill. You typically get the promotional rate but are required to commit to a 12 or 24 month contract with no ability to cancel during that time.
Our Device as a Service program is truly on a month to month basis. If you decide to cancel your service at any time, you are only responsible for the upcoming month payments. Of course, our partners may choose to add on additional commitment requirements, but we leave that decision to them in order to allow for some market differentiation and customization.
Regarding what customers should look for when purchasing a new desktop phone device – look for things that make the phone easy to use and provide great audio quality. Polycom pioneered audio quality with the introduction of our HD Voice and acoustic clarity over 10 years ago and more recently we developed our Acoustic Fence capability which block out background noises in environments such as call centers or open office environments.
On the usability front, users increasingly want their office communications products to be as easy to use as their consumer devices. Choose a phone like our VVX500 or VVX600 that offers a touch screen experience that guides users through “intimidating” operations such as transferring or forwarding a call.
- Can you share any statistics about the DaaS market? Is this approach to technology purchases still in the minority? Is it expected to become the majority?
While I don’t have specific statistics on the DaaS market, since we are the first to offer this kind of program, what I can share is that over the past 15 years, the voice communications market as a whole has been transitioning from an on-premises model where all equipment is owned, installed an managed on-site by IT staff to a hosted model.
In a hosted model only the endpoint devices are physically located on the customer premises and all the back-end infrastructure is located in the cloud and billed on a monthly basis. What we are seeing is that the market for the on-premises model is declining at about 18% per year while the market for the as-a-service is growing at about 15% per year (according to Frost and Sullivan).