What is AV as a Service?
AV as a Service (AVaaS) is a method of acquisition for your audiovisual technology solutions. It is a way for you to make one monthly payment for all of your AV systems and services. AVaaS creates a solution that you can use or have access to, much like a subscription. Unlike the traditional methods of acquisition, i.e., cash purchase, traditional leasing, and bank loans, AVaaS doesn’t end in ownership. It allows you to have use of or access to the technology while it is useful and provides added flexibility and scalability when you grow or needs change.
Due to the rapid advancement in technology and the need to upgrade obsolete technology more frequently, AVaaS is becoming a more preferred way for organizations to pay for their solutions to stay competitive and agile in the marketplace.
Understanding The Market Drivers
The premise for considering this method of acquisition is driven from an abundance of non-recoverable items embedded into most technology solution sales, along with the aforementioned rapid advancement in technology. For these reasons and others, what was once a preferred method of acquisition, capital expense (CAPEX) and ownership, is now giving way to a demand for subscription consumption models.
Take a Look into the Makeup of a Technology Solution Sale
These aforementioned non-recoverable costs are essential to the solution’s engineering and effectiveness, but nonetheless they are still non-recoverable items. These costs include manufacturer margin, distributor margin, integrator margin, warranty, design, training, installation, licensing, programing, software etc. Considering those costs with the modern rapid advancement of technology, which quickly accelerates the depreciation of the equipment portion of the solution. These two combined points leave the market value of the solution a fraction of its original sell price. This decline in value is immediate, within 60 days of installation. In some cases it’s obsolete within a year.
Why AV as a Service Has Gained Favor
1. Technology is Essential/Mission Critical. No one can argue AV solutions are not essential use these days or in many cases, mission critical, so their level of importance, within most organizations, is extremely high. For example, AV technology has replaced the phone system for internal and external collaboration and communication.
These solutions are the definition of essential, but they are also the definition of non-revenue generating. In its purest form of economics, we invest in revenue generating assets because there is a benefit to ownership and a return. Based on the non-recoverable cost of these solutions and the technological advancement, these solutions align much closer to a subscription service versus a capital investment.
2. Need to Protect & Support These Essential Technologies Lastly, if we acknowledge that these technologies are either essential use or mission critical or
both, it only makes sense that they are insured with a complete service plan for the desired term. In order to fulfill a true subscription service, it’s only appropriate and important to include ongoing support services in the offering.
How Fluid Sound Is Offering AV as a ServiceTechnology Solution Sale
Fluid Sound is partnering with TAMCO. Financial experts with over 27 years of experience helping customers with this type of procurement method. This collaboration provides an exclusive AV as a Service offering to our customers.
This AVaaS offering will provide a way to address the myriad of non-recoverable costs and keep their working capital working. Everything will now be packaged, including: installation, the solution and multiyear support into one monthly payment over a subscription service term of 36 or 60 months.
Included in this AVaaS offering is an answer to the rapid advancement in technology and the ability to manage the risk of obsolescence. This AVaaS offering will include a Solution Replacement Guarantee. This allows you to migrate into new technology at any time during the service term, without a financial penalty, if the solution becomes obsolete and no longer meets the customer’s needs.
On the support services, most contracts are inclusive of any break/fix situations that include labor cost and remove any additional service expense throughout the subscription term. The one area that is often left out in any Service Level Agreement (SLA) is Act of God coverage. Categorically, Act of God Coverage means protection against lightning strikes, tropical storms, hurricanes, earth quakes, tornadoes Etc. Our AV as a Service offering will address this. Customers will be protected from the unforeseen expense should an Act of God situation occur.
Ready to learn about the new way to procure technology to help you remain competitive and agile in today’s market?
To learn more about AV as a Service, visit: https://www.fluidsoundav.com/capabilities/av-as-a-service/, or Contact Us for specific questions.