Re: Forget Mice... are you ready for subscription COMPUTERS?

Spalls Hurgenson  <spallshurgenson@gmail.com> wrote:

So, this idea has a little more meat to it. Computer manufacturer NZXT
(they make boutique gaming PCs) wants to make PCs with a subscription
(or perhaps rental) fee. Prices range from roughly $50 to $170USD per
month (plus initial shipping costs), depending on what sort of
computer you get. NZXT also promises "seamless upgrades" every two
years and 24/7 support

Yah, this has been something of a trend lately, hardware companies
trying to emulate the lucrative "software-as-a-service" model with a
"hardware-as-a-service" model.  You noted Logitech trying to do something
like this with mice, and HP tried it with printers for a while.

The problem is that what it really means is that these companies are just
into the ages old rental business, which is materially much different than
the software-as-a-service (SaaS) business.  The SaaS model works and is
immensily profitable because software costs nothing to provide software
to a customer.  If a customer fails to pay their bills the busiess hasn't
lost anything.  And customers are very incentivized to pay their bills
because the software is intrinsicly tied to online services and can be
"repossessed" in an instant.

That's very different from the rental business where the company is
risking an asset that costs the company actual money to provide to
the customer.  There's a very real risk that despite extensive credit
checks and other precautions that the cusomter will at some point stop
paying for the hardware and not return it.  Whether that's because they
suddenly couldn't afford to pay for it anymore (and a lot of potential
customers are going to be living paycheck-to-paycheck) or because they're
fraudsters using stolen credit cards and identities.

Trying to forcibly repocess the hardware isn't an option.  Even for
cars, in the juridictions where it it's allowed (basically just the US),
reposession isn't easy and fraught with legal risks.  For hardware not
sitting out on the open on a driveway or street, you're not getting it
back without the renter's cooperation or an expensive court process.

That's why short-term rental businesses generally require a deposit for
the full value of the object you're renting.  That why longer term leasing
companies generally only lease out high value properties (eg. cars or in
the past mainframes) where the cost of recovery is realtively small and
even then only to "highly-qualified" low-risk customers.  These companies
also have intimate knowlege of the relevant laws of the juridictions
they operate in and extensive experience in indentifying fraudsters.

So I think most of these new attempts at "hardware-as-a-service" will end
up in tears.  It's not the kind of business tech companies are used to.
They just aren't used to dealing with the kind of risks involved, and
it'll will never generate the kind of profits they expect.  Renting out
personal computers isn't some new magic technolgy, it's been done before,
but there's a reason why it never caught on.

--
 l/  //   Ross Ridge -- The Great HTMU
[oo][oo]  rridge@csclub.uwaterloo.ca
-()-/()/  http://www.csclub.uwaterloo.ca:11068/
 db  //