Why Everyone Has “as a Service” Wrong — Including (and Especially) AVaaS

After writing a couple blogs in 2017 about the equally loved and hated potential of “as a Service” (aaS) models to take off in AV, I took a break for a while and watched as the industry discussed the idea.

If you missed my original posts on this, you can catch up here:

AV as A Service

AVaaS Financially Speaking

AVaaS

There are all sorts of arguments for and against AVaaS, but the one that has emerged as a reason that AVaaS will “never” work in certain markets: Service Level Agreements (SLAs). The argument goes like this:

“AVaaS won’t work in my organization because if someone has a problem in a meeting/class/etc. they need support within a few minutes and only in-house staff can get into the building/room in that amount of time.”

I don’t disagree with the fact that on-site support of this nature dictates that support staff be located within a few minutes walking distance. What I do disagree with is that it has any relevance to the viability of an AVaaS model.

Now that you’re fired up… let me explain.

First, managed service models, where the equipment is paid for in full up front as a capital expenditure and support services are sold as an extension of the support, face this SAME issue.

No one has argued managed services aren’t relevant to our industry. If the needed SLA is a 15-minute in-room response, you can accommodate this with an onsite technician supplied by the service provider just as you could with in house staff.  At that point it really comes down to whether or not the organization has the resources to do it in-house or needs third-party help.

Second, there is no requirement for AVaaS models to include managed services AT ALL.

This is where things have been misinterpreted greatly about what an aaS model actually is.

If you’re using MS Office 365, you’re using an aaS product (paid for based on number of employees and which software suites are needed and charged per period of time as opposed to an upfront cost). The advantage is that new versions are automatically included, fees for licensing are based on the number of machines and not on specific MAC addresses, services can be started or stopped at set intervals, etc. But Office 365 is not tied to any type of managed services contract for the PCs, technicians, etc. In-house IT usually manages the Office 365 account or a separate third-party IT services company may do it.

AVaaS doesn’t have to include managed services at all.

It’s a financial model that charges for AV resources based on usage of equipment and is charged for a pre-agreed interval of time.

No, that’s NOT a lease.

A lease takes the full cost of the equipment, amortizes it over time, and then just allows installment payments against that equipment. Leases do not allow for flexible changes in equipment without first “buying out” (paying for) the equipment in the original lease and then starting a new lease term with the new equipment.

This means a lease offers no financial advantage over a purchase other than preserving cash flow.

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You still pay the same amount over time, given keeping your money invested elsewhere nets you the same interest that you’re paying on the lease term.

AVaaS is a per use model, that only charges users based on consumption of resources and allows for flexible changes in the resources needed over time without buyouts.

Let’s say a conference room system costs $25,000 to buy outright and you do five meetings a week, 50 weeks a year for a three-year technology cycle. Each meeting essentially costs you $33 if you amortize the cost of the system across those meetings. A lease would divide that $25,000 over 36 months, not changing the real cost.

Now let’s say you could instead pay $50 per meeting as in an aaS model, but you only pay for actual meetings. If you do less meetings that month, you pay less, and you have flexibility to change things monthly and not every three years. That is the advantage of an AVaaS model.

Here’s another scenario. Let’s say you have 15 meeting rooms based on needing different options for employees and proximity to rooms from each part of the building, but at any given time, a max of 10 of them are in use concurrently.  Wouldn’t it be nice to only pay for the 10 meetings and not the other five rooms that sat empty that day?

This is why virtualization of things like DSPs and having all resources connected to a common network are the unlock to AVaaS models. These models only work if we can reduce hardware costs per room without reducing the needed functionality. Rooms really only need four things to facilitate meetings today. A camera and a microphone to capture video and sound, and a display and speakers to display video and sound. The network is the matrix switch, the virtual DSP does the in-room AEC with the in-room mic and speaker, etc. Control is done via BYOD, and in fact, given that every person carries a camera, microphone, display, and speakers in their pocket, there are several emerging technologies that leverage these as supplementary devices/ILO in-room equipment.

I gave a Car-as-a-Service example in my previous article. The two examples I gave were Uber and Waive Car. They are both aaS models. One includes a driver, one doesn’t. Whether a third-party service provider (Uber driver) drives the car or you drive it yourself, it doesn’t change the fact that its an aaS model.

In the same way, managed services are a separate entity than AVaaS, and whether or not you hire support out or do it in house doesn’t change the viability of an AVaaS model.

So, evaluate managed services based on SLAs and the cost of in house staff vs. outsourced staff parked onsite or offsite. That makes perfect sense.

However, when evaluating the viability of AV-as-a-Service, the only question is:

“Would I benefit from a per-use consumption model or from flexibility to change out AV resources outside of my typical technology refresh cycle?”

If the answer is yes… AVaaS is viable for your organization.