For end-user businesses, saving on upfront costs, flexibility and future-proofing are driving the as-a-service market. Many would prefer to pay monthly with no-upfront costs and the ability to upgrade as required. XaaS is attractive to vendors because they can create MRR from what was previously NRR. This means the company is more likely to grow predictably and survive severe downturns. They can hire staff to support their growth without having to lay them off if orders dry up. COVID was a disaster for NRR/project-based companies whereas MRR companies in general were able to ride it out and without laying off/furloughing staff.
To meet this need Jola offers a range of intelligent, affordable 4G & 5G routers on a rental ‘DaaS’ (Device as a Service) model over multiple terms. DaaS also means faulty routers are dealt with on an ‘Advanced Replacement’ basis and hardware can be upgraded.
As A Service Model Evolving
As the Internet has become faster and more reliable, centralised cloud-based offerings have grown in popularity. Virtually anything can be sold as-a-service and this model benefits both end users and resellers. The pace of innovation has picked up and end users don’t want to get locked into obsolete technologies. For the reseller, the cost of servicing their customers is lower with aaS and recurring margins make their business more profitable.
A key trend driving the as-a-service model is the move to IP and the imminent PSTN switch-off. There are millions of single-call PSTN lines in the UK that are soon to be end-of-life. Upgrading to broadband is expensive and capital costs of converters and 4G routers soon mount up. Jola has solved this problem for resellers and their customers by providing everything they need, on one affordable monthly rental. Robustel and TPLink routers, plus Grandstream ATAs and ISDN-TAs, can all be taken as DaaS.
Companies with high recurring revenues are more valuable than those relying on one-off sales. This was brought into sharp focus during the pandemic when companies with a high proportion of recurring revenues featured almost exclusively in Private Equity transaction news. Telecoms resellers saw their multiples increase while more traditional MSPs had to baton down the hatches and furlough staff.
For Jola partners, the DaaS OpEx model has many benefits over CapEx purchase, not least for cash flow. From the end users’ point of view, they usually have lower set-up costs and they pay over a period of time without having to sign a third-party lease. The monthly rental usually comes with a service guarantee, support and future-proofing (the ability to upgrade within the term). Suppliers who offer XaaS products to resellers remove the need for them to invest CapEx in stock.
Xaas products are ‘in-the-cloud’ and with little equipment actually, on the end users’ premises there is less to go wrong and by removing the need for engineers to physically attend site, service overheads are lower.