Hardware Lifecycle Costs Beyond CAPEX: Why Traditional IT Depreciation Is Misleading and Where the Actual Business Impact Lies.
Many companies still account for their client fleets in the same way as traditional capital assets: purchase via CAPEX, straight-line depreciation, and end-of-life replacement. On paper, this looks straightforward from a procurement perspective. However, this accounting approach overlooks the high follow-on process costs involved in day-to-day operations. A critical look at the entire IT lifecycle reveals why Device as a Service (DaaS) is not merely a financing model, but must primarily be understood as an outsourcing tool for operational IT processes that relieves the burden on IT professionals and makes costs predictable.
TL;DR - What you should take with you
- Focus on operational costs: The economic advantage of DaaS lies not in optimized hardware purchase prices, but in reducing the administrative overhead associated with deployment, support, and lifecycle management.
- Freeing up resources: According to Forrester, it takes about 6.5 hours per device to set up and decommission. With 100 SMB clients, this amounts to 650 valuable IT work hours that can be redirected from routine support to strategic digital projects.
- Minimizing downtime: Thanks to guaranteed replacement processes and strict SLAs, unplanned downtime due to hardware failures is reduced by up to 75 percent on average.
- Preserving liquidity: Converting large one-time capital expenditures (CAPEX) into predictable monthly operating expenses (OPEX) simplifies budgeting for the procurement department and ensures transparent cost center allocation.
In practice, the cost of setting up an IT workstation is only a fraction of the hardware’s initial purchase price. The real driver of TCO (Total Cost of Ownership) lies in downstream lifecycle management. After procurement, a client goes through a complex chain of processes: evaluation, provisioning and staging, inventory management, logistics to the home office, IT support in case of failures, returns management, certified data erasure, and final remarketing. In mid-sized organizations, these manual workflows tie up valuable resources that are then lacking both in IT strategy and in the company’s value creation.
DaaS: Quantifiable Leverage Points in Lifecycle Management
1. Reduction of administrative overhead during deployment
In typical SME structures, IT departments often have a broad scope of responsibilities. The IT team must cover the entire spectrum, from core infrastructure and IT security to end-user support. Every client refresh that comes up hits these teams as a time-consuming, operational wave. Traditional staging—deploying images, software packaging, and final logistics—ties up core resources.
The Forrester TEI study (“Total Economic Impact”; see link at the end of this post), commissioned by our colleagues at devicenow, provides some interesting benchmarks in this regard. The analysts estimate the internal time required for client-side staging and deployment at an average of 4.5 hours per device. According to the study, an additional 2 hours are required for orderly return, decommissioning, and GDPR-compliant data cleansing. In total, this results in a net process effort of 6.5 hours per device replacement.
If we conservatively scale this metric to a mid-sized business scenario—for example, a cyclical refresh of 100 Workplace clients—the result is a cumulative effort of approximately 650 work hours. In practice, this means that this is not a “side task.” Weeks of productive work time are lost by expensive IT specialists, who are then unavailable for other tasks, such as securing the infrastructure or automating processes.
Enterprise metrics as a guide for procurement
Forrester calculates an ROI of 89 percent over a three-year period for a global enterprise model, with a net present value (NPV) of approximately 16.2 million euros. These aggregated figures cannot be directly applied to small and medium-sized businesses. For the CFO’s office, however, they highlight the key point: the economic leverage of DaaS does not come from discounts on hardware purchases, but from the consistent elimination of manual administrative and process loops.
2. Minimizing productivity losses through standardized SLAs
In the SME environment, the failure of a primary work device results in immediate opportunity costs. Due to the lack of dedicated on-site cold-standby pools and fragmented support processes, unplanned hardware replacements often take days to complete. During this time, the affected employee is only able to work to a limited extent.
According to Forrester data, the average downtime for unplanned hardware issues at the surveyed companies was approximately 8 business days prior to the implementation of DaaS. Through predefined service level agreements (SLAs) and standardized replacement processes in the DaaS model, this timeframe was reduced to one to three days. With a statistical average of 2 days, this corresponds to a 75 percent reduction in unproductive downtime. DaaS serves to minimize risk here by outsourcing the supply chain for replacement devices and guaranteeing SLAs that internal IT departments are rarely able to meet when operating on an ad hoc basis.
3. Transition from CAPEX to OPEX: Predictability of Cash Flow
From a CFO and procurement perspective, DaaS offers the advantage of converting irregular investment spikes (one-time CAPEX requirements for hardware refreshes) into fully predictable, consistent operating expenses (OPEX). Technological turning points—such as a widespread migration to new generations of operating systems with stricter minimum hardware requirements or sudden increases in headcount—lead to budget distortions in the traditional purchase model. Monthly, device-based billing, on the other hand, ensures transparent cost center allocation and increases the reliability of liquidity planning.
4. Consolidation of decentralized workspace logistics
The rise of hybrid work models has increased the logistical demands on companies. Shipping preconfigured devices to home offices, retrieving them as part of offboarding processes, and transferring hardware internationally are becoming time-consuming special cases in day-to-day IT operations. Every manual step costs time and requires coordination. Professional DaaS providers like Lendis address this complexity through standardized logistics processes, completely relieving internal IT teams of administrative logistics tasks.
Non-quantifiable strategic advantages of the DaaS model
5. Employee Experience and Accelerated Hardware Modernization
The quality of the workplace infrastructure provided is now a critical factor in employee satisfaction and employer branding. In traditionally budgeted environments, organizations tend to artificially extend client lifecycles to conserve budget. In practice, employees sometimes have to work with outdated systems because lengthy, hierarchical approval processes delay the procurement of new hardware. DaaS breaks down this barrier: automated refresh cycles ensure that the technology fleet remains constantly up to date.
6. Shift toward core strategic IT competencies
The most lasting impact for company leadership likely lies in the shift in responsibilities. When IT professionals are freed from day-to-day operational tasks such as warranty claims, device returns, and routine manual support, they gain the necessary breathing room to focus on the issues that truly drive the company forward:
- Improve IT security,
- Automate business processes and
- provide digital support to the academic departments.
7. Standardization and Ensuring IT Governance
Heterogeneous client fleets (shadow IT, a wide variety of models accumulated over time) increase vulnerability to security breaches and significantly increase the support effort required for patch management. DaaS enforces standardization of the hardware landscape. Uniform model series simplify the definition of security baselines. In addition, the end-of-life cycle is clearly defined: DaaS models integrate certified data erasure in accordance with BSI standards as standard, including a complete audit trail, which provides the company with legal protection and meets the compliance requirements of the GDPR.
Bottom line: The biggest savings don't come from the device itself
Comparing Device as a Service (DaaS) solely to the calculated purchase price of the bare hardware in a traditional direct purchase is too simplistic. DaaS is not merely a financing tool, but a process-oriented outsourcing model for the IT workplace.
Economic efficiency is achieved when internal friction is eliminated: through the automation of deployment, ensuring employee productivity in the event of an outage, reducing logistical burdens, and standardizing governance. For CEOs, procurement, and IT leadership, this means the same thing: the greatest savings from DaaS often lie not in the device itself, but in everything the company no longer has to organize around it.
The Forrester study can be downloaded at the following link: https://devicenow.com/de/forrester/
