What is hardware as a service (HaaS)?

Using a subscription model, usually with variable pricing, companies can obtain a wide range of equipment like computers, networking devices, automation solutions, and more that they otherwise couldn’t afford.

When a company (referred to in a HaaS agreement as the end-user) pays a monthly fee to an MSP for the use of a HaaS device, the MSP is typically responsible for installing and maintaining the equipment on-premises, delivering any relevant upgrades, honoring warranties, and decommissioning and removing it when the agreement ends.

Along with Infrastructure as a service (IaaS) and platform as a service (PaaS), HaaS has become a popular and cost-effective way for small and mid-sized businesses to access the same cutting-edge hardware as large enterprises without paying a large upfront cost.

Infrastructure as a service (IaaS) is a service model for delivering IT infrastructure resources like servers, virtual machines (VMs) and more to users, over the internet, on a pay-as-you-go basis.

Like HaaS, an IaaS model allows users to utilize the latest technologies they need at a fraction of the cost of ownership of buying them outright. It also operates on similar service level agreement (SLA) terms, with the service provider taking on the responsibility of securing, updating and maintaining the resources it is providing. Unlike HaaS, however, IaaS delivers compute resources almost exclusively through a public or private cloud, and few—if any—are ever installed on-premises.

Platform as a service (PaaS) is a service model that provides organizations with a complete on-demand cloud computing platform—including hardware, software and infrastructure—for application development.

Like HaaS, the PaaS model offers users the chance to benefit from all the latest application development and management technologies, like VMs, containers and more, without the cost, complexity of building and maintaining their own platform on-premises.

Unlike HaaS, PaaS providers host the compute resources the user is paying for, including servers, networks, databases and more, in their own data center. While HaaS service models deliver physical hardware for a wide range of purposes, PaaS focuses exclusively on compute resources needed to support a modern application development environment.

The overarching hardware as a service (HaaS) business model is relatively simple—a HaaS provider charges a customer for use of hardware compute resources that it owns, usually referred to as ‘physical infrastructure’ under the terms of the HaaS agreement. The customer pays a monthly fee and is given access to the hardware without having to make a large upfront investment.

Organizations share many different types of hardware and components under a HaaS model. Hardware as a service’s versatility allows the same provider to have end users in broadly different sectors, utilizing everything from CPUs and servers, to data centers and advanced medical devices. Here are a few examples.

Hardware as a service (HaaS) is critical to enterprises of all different sizes and across various industries. It allows businesses to focus on their core capabilities while outsourcing hardware management to qualified third parties. According to a recent report, the global HaaS market was worth USD 153.7 billion in 2024, and is expected to reach USD 3 billion by 2033, growing at a compound annual growth rate (CAGR) of 15%.¹

But the HaaS model comes with challenges as well. Coordinating the installation and maintenance of hardware with third parties can be costly and complex. There can also be security and compliance issues in industries that are highly regulated.

Many enterprises decide that the benefits of HaaS outweigh its risks, and MSPs are constantly improving security and compliance capabilities to reassure customers in specialized industries like health and law. Ultimately, whether HaaS makes sense for a business is a decision that should be made at the highest levels, weighing both pros and cons. Here’s a closer look at the advantages and disadvantages of HaaS.

• Reduction in capital expenditure: By allowing businesses to spend less on hardware that underpins critical IT infrastructure capabilities, HaaS helps companies improve cash flow by moving funds from capital expenditures (CapEx) to operating expenses (OpEx), where it can be used more effectively on core business functions.

• Access to advanced cybersecurity protection: The most recent Allianz Risk Barometer Report shows concern about cybersecurity surging across industries in businesses of all sizes.² HaaS gives organizations access to the most advanced cybersecurity measures available through regular patches and updates provided by experts at the MSP. For example, when a user leases mobile phones for its workforce under a HaaS model, the MSP is responsible for installing and updating the latest cybersecurity protections for those phones. This approach shifts the burden of cybersecurity away from in-house IT engineers, who have other responsibilities, to dedicated cybersecurity experts provided by the MSP.

• Use of cutting-edge technology: One of the biggest drawbacks to investing in the latest technologies is the threat of obsolescence in a few years. HaaS allows organizations to access the latest, most advanced tools through a subscription model where they can be easily replaced, often without an increase in capital expenses, when they become outdated.

• Outsourced expertise and support: Many of the most cutting-edge solutions that modern enterprises rely on require dedicated specialists to ensure they are functioning properly. HaaS agreements allow enterprises to benefit from the latest models of the devices they need, while outsourcing their installation, support and maintenance to experts who are employed by the MSP.

• Operational complexity: While outsourcing installation and maintenance of advanced hardware to a third party is one of the advantages of HaaS, it can also expose users to unnecessary complexity. Coordination between in-house IT teams and technicians working for MSPs can take time. If a particular asset that’s critical to business functions fails and the in-house IT team isn’t qualified to fix it, it can result in downtime before specialized technicians from the MSP are available.

• Confusing sales processes: Since most HaaS solutions are technologically complex, customers often must buy components outright while leasing others to achieve a desired result. This can lead to long sales cycles and complicated billing procedures, not to mention the problem of what to do with components you’ve purchased once you no longer need the HaaS solution you’ve been leasing.

• Data security: While MSPs often insist they can maintain hardware without compromising data that’s stored on it, this can be problematic for certain kinds of industries. For example, in the legal and medical fields, businesses face steep fines when data is compromised. Even when an MSP follows procedures and does everything according to its own operating manuals, its employees’ actions can result in heavy fines and reputational damage simply because of their unfamiliarity with a certain industry.

Hardware as a service (HaaS) is used by many kinds of businesses for a variety of purposes. From managing fleets of vehicles used to deliver goods to providing advanced video conferencing capabilities that keep remote workforces connected, here’s a look at some of the most common use cases.

From pizza delivery chains to airlines, many kinds of businesses depend on vehicle fleets to conduct their core business operations. HaaS allows vehicles of all makes and models to be owned and serviced by an MSP, allowing cooks, pilots and other specialists to focus on what their business trained them to do.

Office environments and their underpinning technologies are constantly evolving, but most companies aren’t in the business of ensuring they are equipped with the latest tools and tech solutions. HaaS is a critical solution for outfitting companies with printers, copiers, TVs and other key pieces of hardware that are essential to an office space at a fraction of the cost of ownership.

Modern organizations need to keep employees connected with the latest mobile technologies and often turn to HaaS models for this purpose. The HaaS model provides the newest, most advanced smartphones to users and takes the burden of updating and securing them off corporate IT departments.

HaaS providers help enterprises track and manage goods from their point of manufacture onto the ships and planes and trucks that get them to customers. HaaS providers leverage the latest technologies—such Internet of Things (IoT) sensors to provide real-time status updates and artificial intelligence (AI) tools that optimize inventory—on a subscription basis, taking the burden of ownership off users.

For businesses with offices in different cities, time zones and even continents, it’s critical for employees to be using the latest remote conferencing tools to stay connected. SaaS solutions, like Zoom and Microsoft Teams still rely on hardware like webcams, headsets and screens to function. HaaS providers ensure their clients have access to the latest communications connectivity devices and that they are securely integrated into their processes.