Image credits: David Martyn Hunt
News Article

Benefits of Service-Level Agreements with Hardware and Software

By Jan Hogewoning | Mon, 07/27/2020 - 17:31

The latest development changing the client-vendor relationship is a service model that integrates hardware and software in one package. This model, combining Hardware-as-a-Service (HaaS) and Software-as-a-Service (SaaS), has been on the rise in Mexico. Many tech service companies already offer this model with differing portfolios, such as CompuSoluciones, Tec Pluss and CHG Meridian. While the renting or leasing of equipment is not new, the differentiation of a service level agreement, Techcrunch writes, is that you are renting the service provided by the equipment and not the asset itself. This facilitates a wider and potentially longer relationship with the vendor, instead of it being a one-time transaction. It also brings many extra benefits to the client.

In terms of benefits, this type of agreement means that companies can replace hardware at no extra costs once it no longer functions properly. Naturally, assets depreciate in value and functionality over time. Companies no longer have to worry about failing laptops, for example, because the vendor has the responsibility to replace the hardware. In an interview with MBN, Simon Harrsen, Director Mexico for CHG Meridian, highlighted the rising costs that come with operating older assets. “After a few years, laptops, for example, begin to cost exponentially more due to maintenance and service costs. By leasing through us, a company can see a massive reduction in their costs. This can be as high as up to 20 percent.” Because companies have continuous access to new equipment, he claims, productivity is also increased. As vendors are now responsible for the functioning of hardware and software, they are more likely to be on top of maintenance requirements. According to TechCrunch, they will feel more inclined to check for hardware issues and upgrade the equipment when needed. “We guarantee that our rented equipment works optimally, meaning that clients can be assured the equipment will not fail,” says Adan Samano, Director General of Tec Pluss to MBN.

As hardware becomes a continuous operation expense, it also allows for more accurate cost/value comparisons, TechCrunch writes. Director of CompuSoluciones, Juan Pablo Medina, explained to MBN the benefits of his company’s license overview platform. “Users (have) visibility over what licenses they are actually using. As a result, they can save costs by cutting unused products.” For hardware it can be difficult to predict the overall cost of ownership, as the lifetime of hardware varies due to a range of conditions, including different types of use. With a service-based model, you are simply paying the service of using that hardware for as long as you want. This also makes it easier to change hardware and software, simply by asking for other products from the vendor. “The client can make changes to the services they receive according to their growing needs,” said Medina. This point is especially relevant due to technology demands changing so fast.

The benefits for the client seem abundantly clear. But what benefits do vendors have? Particularly in a country like Mexico, where many companies struggle with budgets to invest in new IT, this model eliminates access barriers to hardware and software products to clients. This makes it easier for vendors to sell and build long-term client relationships.

The data used in this article was sourced from:  
TechCrunch, Mexico Business News
Photo by:   David Martyn Hunt
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst