Avaya adds Device-as-a-Service to subscription-based portfolio

The new DaaS service differs from the leasing option in that retains control of the device, which some customers like because it reduces their risk. It also allows them to upgrade to a higher priced device with no penalty.

Avaya Holdings has added to their as-a-service portfolio with the addition of a new Device as-a-Service [DaaS] offering. It provides an option for customers to purchase Avaya desktop devices on a monthly subscription basis. It differs from Avaya’s financing purchase option in that Avaya retains title to the phones, rather than the customer. This has appeal to some customers who are looking to limit their risk, and to have more flexibility to upgrade to new devices. The existing base of Avaya -as-a-Service is the primary target for the DaaS offering. Similarly, partners who are actively selling cloud services are likely to opt for this model – particularly since many of them have been asking Avaya for exactly this kind of offering for months.

“In UCaaS, we are in a position similar to where the consumer mobile industry was a few years ago, – when it was moving from voice-only Nokia bricks, because people decided they were willing to pay for data,” said Steve Brock, Director of Avaya Desktop Experience Marketing. “We are in a similar situation now. Until now, UCaaS has been about voice services, But the job description for devices has changed, and we are trying to move the whole UC value proposition beyond voice. This has been a pain point. Everyone has new consumer smart phones, and wants to bring consumer technology into the office so they don’t have to downshift. Customers say they like our advanced phones, but there needs to be more flexibility to reduce risk.”

Partners are relating a similar message to Avaya.

Steve Brock, Director of Avaya Desktop Experience Marketing

“We have Experience events worldwide where we meet partners – this week it was in Milan – and we get 50-100 partners per event,” Brock said. “We have had a strong request by them at these events for about a year – especially ones with cloud services who want to sell devices on the same monthly bill as the cloud service. It gives them a new monthly recurring revenue, whereas before the devices were a one-time capex sell. This has more revenue predictability.”

Brock said that the subscription model also has some advantages of stickiness for the partners.

“It reduces competitive concerns because all the phones fall under the same contract,” he stated. “It makes the customer less likely to go to another vendor, or to another avaya partner.”

Not all devices are available for purchase on the DaaS model – but all of the newer ones are.  They include the J Series, Vantage K155 165 and, K175, and the B109 B179, and B189 conferencing devices.

Three options are available for the duration of the subscription terms: 12 months (1 year) 36 months (3 years) 60 months (5 years). The longer the contract, the lower the monthly cost. At the end of the term, the contract can be renewed with the existing devices, a new contract can be established with new replacement devices, or the contract can be terminated at the end of the term.

The key difference between the subscription model and a lease is the ownership of the device.

“With financing, the customer owns the device,” Brock said. “They own it, and they can’t return it. But in the subscription model, we maintain ownership. It’s also a simpler model. Some of our competitors partner with leasing companies and the financing can be very complex. Customers who prefer our subscription option want to reduce the risk, but they want to stay current, and have the flexibility to get the latest technology. This allows them to do that.” Customers can upgrade to higher-priced devices without a penalty. All customers can also subscribe to the DaaS service, while Avaya’s Device Flex Purchase Plan is limited to customers of the Powered by Avaya Cloud Services.

Customers already buying UCaaS from Avaya are the most logical target for the new service.

“The UCaaS customers are the primary target,” Brock stated. “This lets us now provide them with the latest technology.” Avaya already offers Contact Centre-as-a-Service and Communication Platform as-a-Service in addition to UCaaS.

The DaaS offering is in the U.S. now. Rollout to other countries, including Canada, is scheduled for early 2019.

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