HAAS - What would a customer pay?

[tom11011]

Hi Group, I would like to start another conversation regarding Hardware As A Service for business, specifically leased and managed pc's. Is it really doable? That is my question.

I would like my business to have the ability to build and lease an unbranded, managed pc, such as this little beauty. I like small form factor and mini atx computers, I think they look good and look professional to the customer. Black stands the test of time in my opinion.

I've done a little price research and here is my findings. My take on the entire proposition is I want to own as much of the solution outright as possible, a play for the long term. I know there is Office 365 as well as SPLA, but I'm going down a different path for sake of discussion.

One Time Costs

Computer without monitor $300 (idea being to replace their current pc)
Windows 8.1 Full $199 (My understanding is Full can live on beyond the life of the computer as opposed to the cheaper OEM license)
Windows 8.1 Rental Rights license $23 (I could only find 2010 pricing)
Office 2013 Pro $379
Office 2013 Rental Rights license $58 (again, unclear on present day price)

Total $959

Recurring Monthly Costs

GFI Antivirus $1/mo
GFI Remote Monitor and Management $1/mo
GFI Backup $10/mo (assuming 20 gigs)

Total MRC $12

So what would a customer pay assuming they see value in the MSP model?

If a customer would sign a 36 month agreement, in order just to break even, I would be looking at needing to bring in ~$39/month.

Would a customer pay $50/month to have a new, managed computer on their desk with antivirus, backup, remote monitoring and management? Could the industry be moving in this direction? I know some msp's are charging $50/mo and not even supplying a pc.

Obviously a deal like this gets better for the MSP over time, especially if you own most things outright. At some point the equipment will be paid in full. Things will break, but parts will be able to be harvested.

I'm not entirely clear on what paths would be available when the next version of windows or office comes out.

At the end of the 3 year lease, the MSP has $396 total per pc to show for the effort ($11/mo per pc). If that same msp were to extend said lease for the same customer 1 extra year, msp would be looking at $456 for the year. If not, he has sellable or leasable equipment in stock.

Other benefits, inking a deal such as this gets your foot in the door at said company, maybe now we are looking at blocks of labor, server sales, managed firewall, etc.. You're in the door, the goto guy.

Discuss

EDIT: After April 2014, Microsoft will no longer supply patches or security fixes for Windows XP and Office 2003. Companies are going to start to look at their options with more urgency.

 

[seedubya]

Well do the rest of the maths. Assuming you are making $11 per month per PC. How much income do you need to run your business and pay your overhead, own wages etc. Let's just call it $6000, assuming it's just you. That's approximately 550 PCs you need to scale to before you start to break even. Who's going to sell these? Who's going to maintain 550 PCs on their own? Not to mention the outlay - approximately $522,000

Look I think it could work - just not at $11.

 

[tom11011]

Well do the rest of the maths. Assuming you are making $11 per month per PC. How much income do you need to run your business and pay your overhead, own wages etc. Let's just call it $6000, assuming it's just you. That's approximately 550 PCs you need to scale to before you start to break even. Who's going to sell these? Who's going to maintain 550 PCs on their own? Not to mention the outlay - approximately $522,000

Look I think it could work - just not at $11.

One thing I probably should have said, I already run an IT business. This would be an add-on to the business, a new source of revenue, not the entire business (at least for me) but your point is understood.

 

[altrenda]

We rent iMacs with just the os for $100/month, add $25 per month for Office or other similar software.
This is less than someone like SmartSource charges, and they rent to most of the company's in our industry.
I think their pcs go for around $65. Equipment failures are free, but other services like virus removal are extra.

 

[Rocco]

$11 a month doesn't sound worth it to me. Also, who is your target. If home users are your target, 8.1 might work. But if its business, I don't think 8.1 has become acceptable to most of them. There are still many compatibility issues with it. So I would find out what my target finds acceptable before doing it.

My 2 call ups last week were to get rid of 8 and downgrade to 7. That was for home users.

 

[tom11011]

$11 a month doesn't sound worth it to me. Also, who is your target. If home users are your target, 8.1 might work. But if its business, I don't think 8.1 has become acceptable to most of them. There are still many compatibility issues with it. So I would find out what my target finds acceptable before doing it.

My 2 call ups last week were to get rid of 8 and downgrade to 7. That was for home users.

This would be for business, I've editted the post to reflect that. Can you elaborate on the compatibility issues?

 

[BrentfromZulu]

Personally, I have them use Windows 8 and show them Classic Shell. Windows 8 Desktop is better than Windows 7. I would say unless you have to use Windows 7, go with Windows 8.1 + Classic Shell or alternative.

 

[BrentfromZulu]

Back on Topic, I went over some numbers yesterday about how to offer HaaS. This is what I came up with.

Normal Cost of PC = 600 (Dell Outlet for an Optiplex i3 4GB Ram, 3 yr and Monitor)
Cost of Support = $50 a month (includes GFI Services)
Cost over 3 years = 600 + 50*36 = $2400 Computer Cost per 3 years

Or
EDIT: Fixed

Same PC at $600
Offer to lease
Cost of PC = $10-15 a month
Cost of Support = $50 a month
Cost over 3 years = $60 - 65 * 36 months = $2160 - $2340

After 3 years, you could ask if they want to buy it out from you ($240 to make it it back to even, although the hardware would be 3 years older and they might not be interested) or have them lease a new computer for the same price and you could repurpose the existing computers to lease to newer clients.


These are figures that I came up with, and they might be lower than what it should be. But for a new client with limited funds, they would appreciate this option as opposed to paying $600 * 10 employees. After the 3 years, you could then get them on the same plan and upgrade them to something else and they keep that same rate.

I would love to hear other peoples suggestions or ideas on this.

 

[tom11011]

Back on Topic, I went over some numbers yesterday about how to offer HaaS. This is what I came up with.

Normal Cost of PC = 600 (Dell Outlet for an Optiplex i3 4GB Ram, 3 yr and Monitor)
Cost of Support ~~ $50 a month (includes GFI Services)
Cost over 3 years = 600 + 50*36 = $2400 Computer Cost per 3 years

Or
Same PC at $600
Cost of PC = $30 a month
Cost of Support = $50 a month
Cost over 3 years = $80 * 36 months = $2880

These are figures that I came up with, and they might be lower than what it should be. But for a new client with limited funds, they would appreciate this option as opposed to paying $600 * 10 employees. After the 3 years, you could then get them on the same plan and upgrade them to something else and they keep that same rate.

I would love to hear other peoples suggestions or ideas on this.

Not following what you are costing out, are you saying this would be a cost for a customer going out and buying on their own?

 

[BrentfromZulu]

Not following what you are costing out, are you saying this would be a cost for a customer going out and buying on their own?

My post didn't make sense. The top is them buying the computer outright and the bottom is for them leasing the computer.

 

[BrentfromZulu]

$11 a month is not enough to cover your costs.

Personally, the $50 a month for support is for me to inspect if there are any threats or updates and resolving them, as well as other issues they might have on their computer.