Video conferencing provider Zoom announced this week that it would begin selling enterprise-grade communications hardware through a hardware-as-a-service (HaaS) model. Subscribers will pay for monthly access to hardware such as phones, wide-angle cameras for conference rooms, and meeting-room touchscreen displays.

employee communication and collaboration tech top the list for expected spending increases as a result of the pandemic
Business Insider Intelligence

The HaaS model is intended to eliminate up-front costs that can make such hardware prohibitively expensive — for instance, the Poly Studio X30 video conferencing bar costs $2,200 to purchase outright, but will be available under Zoom's HaaS model for $75 per month. For now, the program will only be offered in the US.

Zoom can boost customer loyalty by expanding services under the HaaS model. Customers relying on Zoom for software, hardware, and services will have a harder time switching providers, as doing so would require leaving the streamlined ecosystem designed to reduce IT complexity.

Zoom believes the HaaS model will also appeal to enterprise clients looking for scalability, since the number of devices can be adjusted from month to month. This could be particularly attractive to companies amid the economic downturn, since employee headcount is in flux at many companies. Finally, the HaaS model can offer clients a more predictable cost structure, as Zoom Support will replace broken devices and, in the long term, update hardware as frequently as every three years. 

The addition of HaaS will help Zoom stave off the threat to its market share posed by Microsoft and Google. Though Zoom took an early lead in the pandemic-induced video conferencing boom, Microsoft and Google have since encroached on its share of the market: The tech giants matched Zoom feature-for-feature, and prominently highlighted integrations of their respective video conferencing platforms within their already-popular enterprise software ecosystems.

Zoom's long-term success is predicated on its ability to boost customer loyalty so that enterprises — virtually all of which are already using a productivity suite from Microsoft or Google — choose not to defect. However, HaaS likely won't remain a competitive advantage for long: Cisco already offers HaaS for its collaboration suite, and it wouldn't take long for Microsoft or Google to launch alternatives as well.

Want to read more stories like this one? Here's how you can gain access:

  1. Join other Insider Intelligence clients who receive this Briefing, along with other Connectivity & Tech forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
  2. Explore related topics more in depth. >> Browse Our Coverage

Are you a current Insider Intelligence client? Log in here.