Why AVaaS is not just a Glorified Lease

I was participating in a social media chat the other day when the subject of AV as a Service (AVaaS) came up.  For those not familiar with the subject, I’ve written a little about it in the past, and if you’d like a little background feel free to click here or here.  During the chat, someone stated that AVaaS was nothing more than a glorified lease, and that lease options have been available in AV for years.  I don’t disagree with the idea that equipment leases are old news, but AVaaS is not just a glorified lease.  The potential advantages of AVaaS extend well beyond equipment leasing, and the differences are far greater than the financial vehicle used to pay for them.

In general, “as a Service” models offer flexibility and upgradability as part of their structure that leases just don’t offer.   Take a car for example.  If you lease a BMW 3 series, you will pay less per month than a traditional purchase because you are only financing a portion of the car based on mileage and the lease timeframe.  However, that BMWs color, features, horsepower, etc will remain constant over the course of that lease.  You are tied into that “hardware” if you will until the lease term is up unless you buy out the remainder of that lease at a premium price.  Typically at the end of the lease, you can either buy the vehicle for a predetermined market price or return it.

Sticking with the automobile example, now take a look at something called Fair.   Fair allows users to pick a pre-owned car based on a monthly rate.  They can drive that car at that monthly rate for as long or short a period as they would like.  Let’s say they have that BMW 3 series, and then they get a job as an AV installer (awesomeness in itself!) and they need a pickup truck for tools.  With 5 days notice, they can drop off that BMW 3 and pick up a Ford Raptor instead and start paying the payment associated with that vehicle.  Then 9 months later a baby arrives.  The Raptor quickly turns into a minivan and the monthly payment again reflects the change.  Fair is a true Car as a Service play that allows the driver to pick and choose what features they need in a vehicle at any given time and change vehicles.  They are not tied to a payment term or a piece of hardware that no longer suits their needs.

Think of AV as a Service in the same way.  An AVaaS model provides a way for customers to pay for services they need while providing flexibility to add or remove them in the future if needs change.  The reason that AVaaS is closer than ever to reality, is mostly due to the prevalence of IP based equipment as well as the emergence of application-driven features that move parts of the AV ecosystem away from hardware appliances and virtualizes them.

Of course, there will be some minimum components in each space that are hardware based.  There needs to be some sort of display device to share content and video, speakers to move air for sound, microphones to pick up sound, and cameras to capture video.

Yesterday, displays and sources connected into matrix switchers, cameras connected directly to codecs or PCs, and speakers connected to amplifiers that were fed by digital signal processors receiving the microphone signals.

Today, all of these devices can just connect to a network switch.  Video sources can be cloud-based, camera signals are IP, and DSP software can assign properties to any of the IP based microphone arrays and self-powered or POE  speakers connected to the network.  The result is a hardware light ecosystem with much more flexibility and the ability to activate or change the way these components work together based on the ever changing needs of the customer.  Because the items are all connected to the network, not only are remote support and control of the systems made easier, but data can also be accumulated and how and when the systems and their components are used, making long-term technology management decisions easier to make and ROI easier to achieve.

An AVaaS offering, that includes the installation of the minimum components, as well as virtualized digital signal processing, IP based audio and video, and camera routing, and virtualized device control and management offers much more than an amortized way to pay for hardware.  Add in managed services with an appropriate Service Level Agreement and a predetermined cost for adding or upgrading the minimum hardware as needed, and you are now offering customers an innovative new way to pay for and manage their AV systems.

At the end of the day, AVaaS, if done properly is much more than a way to amortize the total cost of fixed equipment over time.  It’s not a glorified lease, and it may just be a business model we need to embrace in the near future if we want to continue to support our clients in the way they want to be supported.

About Mark Coxon

Mark Coxon is an AV industry native and blogger for the rAVe BlogSquad. You can reach him directly at mark@marketexplosion.me.