Access to or use of some AV product, service, or solution. There is no ownership of the technology and no ownership responsibilities. There is also no significant, upfront expense. It is intended to be a service provided for a predictable, manageable, monthly payment.
The “WHY” behind AV as a service
4 Important Factors to help you understand how as-a-service became popular and why it makes the most sense in today’s environment.
1.) ECONOMICS OF OWNERSHIP
AV solutions are non-revenue generating assets because they rapidly depreciate the day after they are installed. Paying cash with after-tax dollars on non-revenue generating assets defies basic economics. Importance vs. Economics: AV solutions are essential use, but there’s a big difference between the two.
Why do AV solutions rapidly depreciate the day after install?
In every bill of materials you have a high level of non-recoverable costs (i.e. −Manufacturer margin, distributor margin, integrator margin, licensing, installation and sometimes comprehensive with extensive labor, programming, software, design, warranty, training etc.). This can make up 30-50% of a solution. These costs are non-recoverable because after install none of it can be returned.
2.) RAPID ADVANCEMENT OF TECHNOLOGY
AV technology continues to change rapidly, for the better, with no sign of it slowing down. Customers are recognizing the challenges to staying at the forefront of technology and having to request higher CAPEX budgets. This is why they are embracing and giving more value to use/access versus ownership.
3.) INSURING ESSENTIAL USE TECHNOLOGY
AV technology has replaced the phone system for internal and external collaboration and communication. How can you NOT insure this type of technology with a complete service & maintenance plan beyond the warranty period? You can’t! It’s too much of a risk. Our assets are more essential than the technology.
Economic downturn has placed pressure on budgets. In a recent survey of national retail chains, 89% stated their 2020 and 2021 budgets have been greatly impacted. Continued economic uncertainty places pressure to preserve cash flow.
3 Questions to Ask Any As-A-Service Provider
Not all as-a-service offerings are created equal. When considering an AV as a Service Solution for your technology it’s important to do your research and be aware of what you are receiving. Below are suggested questions to inquire about with your solution provider when considering an as a service solution.
What Is & What Is Not Included?
Ask about the different elements that are included in the solution. Will hardware and software be included separately? Will items like licensing, install, warranty, maintenance, etc. be a part of the as-a-service monthly price? A true as-a-service should be a low monthly price with everything bundled in. There should be no need for large upfront à la carte costs.
What Are You Responsible For?
Make sure you are fully aware of your responsibilities and what the solution provider will manage for you. What’s the protocol if something malfunctions in one, two, three years time? Who is responsible for keeping the equipment in good repair? A true as-a-service solution will include things like support services for the entire term and the ability to scale if your needs change or the technology becomes obsolete, without major financial implications.
What Are The Financial Implications & Ownership Outcomes?
A true as-a-service will be an operating expense opposed to a capital expense, make sure you ask which one your as-a-service offering is. Be clear on all expenses. Will there be upfront expenses and what is the total monthly payment. While some small fees may be possible an as-a-service solution should not have any large upfront expenses. If your as-a-service solution results in you owning the technology you do not have an as-a-service, but a traditional lease in disguise. If as-a-service subscription model is what you are after make sure you inquire about this detail.
What is Shield?
SHIELD is an exclusive way to pay for audiovisual equipment as a service. It is an agreement with added-value that bundles your equipment and support services into a low subscription-based monthly payment. Shield provides your organization with more freedom, control, and flexibility than any other payment option available, including cash purchases and traditional leasing. Shield, keeps you at the forefront of technology so you can stay competitive, never having to worry about obsolete technology holding you back.
Benefits of Shield
- Solution Replacement Guarantee (SRG): Exclusive to SHIELD, the SRG protects your technology from becoming inefficient or obsolete. SHIELD guarantees if your current solution no longer meets your needs or becomes obsolete for any reason, you can install a new system at any time during your term without financial penalty, hidden costs, or rollover balances. Your existing agreement will be completely forgiven.
- Act of God Coverage: Life happens; fire, lightning, tornadoes, etc. In the event of a natural disaster, SHIELD protects you by covering your out-of-pocket insurance deductible on the damaged equipment.
- Bundled Maintenance & Support: Protection without financial burdens. Lock the cost of your vendor’s support agreement at today’s labor rates for the duration of your term. Shield makes adding multiyear support seamless by bundling it into your monthly payment.
- Financial Benefits: SHIELD is an as-a-service subscription payment program for organizations that do not want to own their technology solutions. Shield allows you to preserve cash flow so you can use your capital for revenue generating business activities. And, when considering the time value of money, SHIELD is often the lowest cost method of procurement.
- Flexible End of Term Options: SHIELD offers multiple end of term options. Renew the agreement with or without the SRG intact, return the equipment, or select a new system. Choose what you need, when you need it. Unlike other payment options, SHIELD gives you the flexibility to choose at the end of term.
Is SHIELD The Right Choice for You?
SHIELD gives you peace of mind to grow and evolve your AV solutions as your needs grow and evolve. This flexibility is ideal to remaining competitive. Owning technology prevents you from being agile in the market because it lacks that flexibility and can bottleneck your growth. The way we buy technology has changed. If you are less concerned with ownership and need to focus on outcomes, access, and usage of the technology, SHIELD, AV equipment as a service, may be for you!