Subscriptions aren't just for software anymore. From robots to factory sensors to autonomous vehicles, modern hardware companies are rethinking how they deliver value—and how they get paid for it. Hardware-as-a-service (HaaS) is emerging as the future of the equipment industry: a model that blends physical products with software, support, and predictable revenue.
| 🤔 | This expands and updates our original report on what is hardware-as-a-service. This post focuses on the latest HaaS trends and the business benefits we've seen in the last two years. | ||
Hardware-as-a-service is a business model offered by equipment manufacturers that enables customer access to critical hardware on a subscription or usage-based (“pay per use”) payment model. “Pay as you go,” “managed services,” and “outcome-based asset contracts” are all business models that companies use to build out successful hardware-as-a-service offerings.
The model is sometimes alternately known as equipment-as-a-service (EaaS), machine-as-a-service (MaaS), or device-as-a-service (DaaS). In specific industries, this might take the form of robots-as-a-service (RaaS) or 3D-printing-as-a-service (3DaaS), for example.
Bundling proprietary software with proprietary hardware, which then requires proprietary service, is what makes a complete HaaS offering. No buyer has the expertise in-house to maintain complex proprietary equipment on their own—whether an autonomous forklift, an automated tractor, or a metal 3D printer. The HaaS model delivers the right technical expertise as part of an end-to-end solution that has hardware at the center.
HaaS is an evolution from one-time sales of capital goods to a recurring-revenue model. In legacy industry sales terms, it shifts the business model from capital expenses (capex) to operating expenses (opex). Industrial machine manufacturers can implement HaaS with different payment models: time-based (e.g., a weekly or monthly term), scale-based (e.g., fixed by square footage), utilization-based (e.g., per hour of usage), or output-based (e.g., per number of tasks an asset performs).
Hardware-as-a-service offers major advantages for both equipment providers and their customers. Here’s how both sides benefit.
Recurring, predictable revenue. HaaS transforms one-time sales into ongoing subscriptions, giving providers revenue streams that are more predictable. This model offers better visibility into demand and accelerates sales cycles: since customers face lower upfront costs, budget approvals happen faster and deals close more quickly.
Higher long-term profitability. Although it takes longer to recoup the cost of goods, HaaS providers typically earn more over the asset’s lifetime than they would through a one-time sale. The model allows providers to capture more of the equipment’s total value while strengthening margins.
Stronger customer retention. By bundling hardware with software, maintenance, and services, providers create an integrated, ongoing relationship. Customers rely on the provider for everything from software updates to equipment repairs, and usage-based billing keeps the business model aligned with delivered value.
Lower upfront costs and predictable pricing. HaaS replaces steep capital expenditures with manageable operating expenses. Flat monthly or annual fees improve budgeting and free up cash flow, while the provider’s responsibility for maintenance eliminates unexpected repair costs.
Built-in scalability. Customers can scale their hardware footprint up or down as business needs shift—without being stuck with idle assets. This flexibility is especially useful for companies with seasonal demand or evolving operations.
Always up-to-date, fully maintained equipment. Since the provider retains ownership, they’re incentivized to keep hardware in top shape. That means customers get proactive maintenance, timely upgrades, and less risk of costly downtime or obsolescence—all without needing in-house technical expertise.
Manufacturers building a range of types of hardware and equipment—temperature and occupancy sensors, first-response drones, security cameras, service robots, autonomous forklifts and electric lawnmowers, drywall finishing robots, 3D printers, and more—are turning to managed hardware models. These hardware-as-a-service agreements are made up of different components with different HaaS pricing plans, but they all promise recurring service in exchange for recurring payments.
Kiwibot builds semi-autonomous delivery robots equipped with GPS technology, advanced camera sensors, stereos, lidars, and AI to deliver food, medication, and more to students on university campuses and consumers in U.S. cities. The robots can generate optimal routes, operate in rain and snow, safely maneuver crosswalks and avoid obstacles, and send distress signals to an on-campus technician when stuck. Protective measures include built-in mechanisms that produce loud sounds if the Kiwibot is tampered with, or call the police and send a GPS signal so they can be found. Consumers order over apps like Grubhub and Sodexo’s Everyday and track the robot’s journey. When it arrives, they open the Kiwibot by scanning a QR code.
The company offers its Kiwibots under a hardware-as-a-service and delivery-as-a-service (DaaS) model: Kiwibot charges a flat fee per order, which can either be absorbed by the restaurant or retailer or passed on to customers. Kiwibot subscription plans include other perks such as in-app discounts and birthday rewards.
TRACTIAN builds sensors for condition monitoring and energy management, along with a software platform for asset management. Factory or plant operators connect TRACTIAN’s sensors to their assets; installation is non-invasive and takes a matter of minutes. Smart Trac Ultra uses AI to monitor vibration, temperature, runtime, and RPM data to detect and diagnose machine issues before they become critical. Energy Trac sensors track energy consumption and costs by sector, asset, or shift to identify opportunities for efficiency. Working alongside its hardware, TRACTIAN’s proprietary software serves up automated reports and supports work order and inventory management, maintenance scheduling and strategy, labor allocation, and more.
The company offers its sensors under a hybrid hardware-as-a-service (HaaS) pricing model: Customers purchase the sensors outright and then pay recurring fees for the software. According to TRACTIAN, the pricing model allows the service to pay for itself in less than two months.
Gatik designs autonomous driving systems and outfits trucks with AI-powered self-driving technology for short- to medium-haul B2B logistics. The company’s proprietary Level 4 autonomous technology, Gatik Carrier, powers the trucks, which transport goods between distribution centers, fulfillment hubs, and retail locations along the middle mile. Trucks are equipped with redundant safety features across braking, steering, and compute systems. Routes are designed on city streets with speed limits below 50 mph, and intentionally avoid schools, fire stations, and dangerous intersections. Once the trucks arrive at Gatik hubs, human drivers step in to complete the final leg of the delivery.
The company’s business model is autonomous-transportation-as-a-service (ATaaS). Customers sign five-year contracts, allowing Gatik to lease trucks from partners like Ryder and outfit them with the sensors, cameras, lidar, and computing systems that operate the vehicle. A fixed-fee subscription includes the trucks and accompanying software, real-time data insights, and maintenance, which is performed by the OEM. A portion of customers’ subscription fees covers the truck lease, enabling Gatik to maintain an operationally- and asset-light model for the time being.
There are eight common categories generally included as part of a HaaS solution (including the hardware itself). Every managed hardware company combines some subset of these categories—services that support the hardware itself—to define their unique offering:
1. Hardware. All HaaS offerings include some piece of hardware. This might be referred to generically (such as a device, equipment, or machine) or may be described more specifically (such as a robot, sensor, or tracker). Hardware is sometimes included as part of a package, sometimes offered separately on recurring payments, and sometimes sold outright as part of a hybrid HaaS offering.
2. Software. Most HaaS offerings include one or multiple flavors of software. This might include firmware on the equipment, a software package installed on the machine itself, software running on a local server (e.g., WMS), or software-as-a-service delivered via the cloud. This component of the HaaS offering can also include software updates and upgrades.
3. Consumables. Depending on the HaaS program, consumables may be a core offering. Consumables are items that are used up or wear out in the process of utilizing the HaaS solution. One of the most common examples are print media for printing systems and additive manufacturing (such as inks, cartridges, resins, and powders). If consumables are regularly needed, they must be considered in your solution design.
4. Accessories. Accessories are used to enable the hardware or augment the HaaS solution with additional capabilities. Accessories are often sold separately from the core equipment, even though an accessory may also be a piece of equipment itself (which takes time to reach the end of its useful life) rather than a consumable (which is used up relatively quickly).
5. Installation, setup, and training. For some HaaS solutions—such as deeply integrated systems—the installation, setup, and training is a significant investment for the manufacturer. For other standalone products, there is minimal or non-existent work needed up front to configure the deployment.
6. Maintenance, support, and repair. Many HaaS programs require regular upkeep to deliver the full solution on an ongoing basis. This could be ad hoc maintenance if hardware stops running, components that require occasional repair, or software that incorporates manufacturer support. Very few HaaS solutions require no ongoing enablement during the term of the contract.
7. Warranty programs and service plans. Warranty programs and service plans insure the subscriber that the HaaS solution will consistently operate at committed performance levels. These plans are often sold as an add-on to the base plan because they are oriented around risk mitigation. Such plans are most often sold to subscribers trying HaaS for the first time, when the HaaS solution runs mission-critical operations, or if the subscriber has a lean in-house team.
8. Delivery and shipping. Depending on the complexity of the HaaS solution, delivery and shipping can be a significant cost. When charged, these fees may be a fixed rate, invoiced as a pass-through from the delivery service, or direct-billed from the freight carrier.
While hardware-as-a-service shares some traits with other “as-a-service” and financing models, there are key differences in how value is delivered, how hardware is managed, and who takes on long-term responsibility.
In traditional hardware sales, manufacturers simply sell the equipment—no ongoing service, software, or support required. In contrast, HaaS evolves the hardware pricing model with software, installation, monitoring, maintenance, and more. It’s not just a product; it’s a fully managed solution.
HaaS customers are buying access to an ecosystem, not just a machine. This shift—from ownership to bundled services—allows for automation, predictive maintenance, and tighter integrations across workflows.
Leasing allows customers to make monthly payments toward eventual hardware ownership, with express or implied interest. Maintenance and repairs are typically the customer’s responsibility once the lease ends.
With HaaS, customers never own the hardware. The manufacturer retains responsibility for the full equipment lifecycle, including ongoing performance, upgrades, and end-of-life disposal. The focus is on uptime and utility—not asset ownership—making HaaS more aligned with business outcomes and long-term service quality.
Both HaaS and IaaS are pay-as-you-go models. But while IaaS gives customers remote access to virtual infrastructure (such as servers, compute power, and storage), HaaS provides physical hardware that lives at the customer’s site and is managed by the provider.
HaaS introduces unique operational challenges that IaaS does not—such as shipping, setup, repair programs, and asset tracking. HaaS also involves tighter hardware/software integration and often includes more complex billing logic tied to physical usage.
PaaS gives software developers access to remote platforms to build, test, and deploy applications—removing the need to maintain infrastructure or environments. PaaS is entirely cloud-based.
HaaS, on the other hand, is grounded in physical products. The provider must manufacture, store, ship, monitor, and maintain physical hardware at the customer’s location. This makes billing and accounting much more complicated for HaaS companies than it is for PaaS companies. HaaS companies must not only manage a subscription, but also track hardware activity in the field and assign that activity to commercial contracts.
HaaS is the right model for an organization (and for customers) in several circumstances:
How should an equipment company decide when HaaS makes sense? How does a business best monetize its hardware to see returns? There’s no “right” answer, given different assets and different verticals have different customer assumptions, expectations, and pressures. But here are three things worth considering:
As the HaaS business model evolves, technology has to evolve to support it. That’s where Hardfin comes in: to help you easily manage, operate, and report on your hardware business, regardless of the complexity of your business model. Track every asset, manage financial operations, and turn every piece of hardware into recurring revenue.
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