We’ve All Heard of SaaS…But What Is HaaS?

Hardware-as-a-Service (“HaaS”) is a model where companies pay recurring fees to use provider-owned equipment instead of purchasing it outright. It has become a powerful enabler of technology adoption, capital efficiency, and resilience in a market where traditional equity is scarce and companies face mounting pressure to scale smarter.

In practice, HaaS serves as a vehicle to finance capital improvements with less upfront capital expenditure (“CapEx”), turning CapEx into a predictable operating expense (“OpEx”) and enabling companies to scale more efficiently. This shift helps accelerate technology adoption in industries where high upfront costs and operational complexity have traditionally slowed progress.

For investors, HaaS combines the growth potential of emerging hardware technologies with the stability of contracted, infrastructure-like cash flows. HaaS companies attract valuation multiples 59% higher than non-HaaS frontier tech peers, according to Silicon Valley Bank, reflecting the model’s appeal in delivering predictable, recurring revenue and visibility into long-term performance.

Rise of HaaS

The rise of HaaS reflects a broader shift in how technology is accessed and financed, as businesses and consumers are increasingly embracing  ​“as-a-service” models that emphasize flexibility, predictability, and ongoing upgrades — from cell phones to cars.

Additionally, tightening credit conditions and high interest rates have constrained access to traditional equipment financing, particularly for growth-stage businesses and capital-constrained enterprises. This scarcity strengthens the case for HaaS as it creates predictable payment flows that can support debt and structured capital solutions. For operators, that means preserving equity for strategic growth initiatives rather than tying it up in hardware purchases.

While the mechanics of HaaS vary by sector, the model’s value creation can be analyzed through the lens of its stakeholders: customers, providers, and investors. Each derives distinct financial and operational benefits from the transition away from ownership toward service-based access.

The HaaS Value Proposition

• For Customers: HaaS lowers barriers to adoption by eliminating large upfront CapEx and converting lump-sum investments into predictable OpEx. This improves cash flow management and reduces operational complexity by outsourcing maintenance and performance guarantees. The model enables customers to pilot new technologies without committing significant resources. HaaS also provides hardware optionality, bundled O&M, and a seamless path to upgrades, broadening access to innovative technologies without large upfront investments.
   
• For Providers: HaaS providers capture advantages in revenue stability, profitability, and customer engagement. Recurring contracts generate predictable cash flows and improve cash-on-cash returns compared to direct sales. Providers benefit from higher lifetime customer value, service integration, and ongoing touchpoints that enable upselling. Retained ownership also allows providers to refurbish and redeploy hardware, reducing churn and increasing asset efficiency.
   
• For Investors: HaaS offers a differentiated risk-return profile. Regular, cash-on-cash payments create steady yield, while contract-backed revenues provide visibility into long-term performance. Properly structured, HaaS investments generate attractive internal rates of return (IRRs), supported by stable cash flows, low delinquency rates, and downside protection through special purpose vehicle (SPV) structures and the ability to redeploy assets in a downside scenario.

What distinguishes HaaS is not simply the shift from CapEx to OpEx, but the resilience it creates across systems: predictable revenues for providers, lower barriers for customers, and risk-adjusted, contract-backed returns for investors. When structured thoughtfully, HaaS works to align incentives across all parties and aims to deliver both financial performance and measurable environmental outcomes.

If you’re interested in learning more, we invite you to download our report, ​“From CapEx to OpEx: The Hardware-as-a-Service Opportunity.”