The hostage-as-a-service (HaaS) business model has become increasingly prevalent in the security industry. Big Silicon Valley corporations have been utilizing this non-consumer-friendly pricing model to take advantage of their customers and squeeze out every last bit of cash that they can from them.
WHAT IS THE HOSTAGE-AS-A-SERVICE MODEL?
The hostage-as-a-service pricing model typically takes the form of a monthly, yearly, or multi-year subscription fee to use the security cameras that are purchased as leverage to make it very difficult for a customer to cancel if they are unhappy with the quality of installation or service. Now, that seems fairly normal, right? Well, let’s think about it in a different way.
Let’s say that you just purchased a brand new camera because you want to get into photography and a software package that allowed you to publish those photos. Cameras, especially high-end cameras, can be pricey, but, at the very least, once you’ve purchased it, you can use it for the rest of your life, and if you don’t like the software, you can choose to use a different provider and continue to use your camera.
Now, subscription services in and of themselves are not bad. Take Netflix for example. You pay a monthly subscription fee to stream movies and shows to your television. If you decide that you don’t want to keep using Netflix and want to save some extra cash each month, you can cancel your subscription.
But what if by canceling your Netflix subscription, your television, as an expensive technology device, stopped working, turning it into a useless piece of hardware that can’t even be turned on. That would probably persuade you to keep paying that Netflix subscription fee each month, even if you wouldn’t really use it or didn’t like the movies and shows being offered.
That is the key difference between traditional subscription models and the hostage-as-a-service model. Without paying the monthly subscription fee that comes with the security cameras you just bought, they are useless. Security cameras’ primary function is to record video and stop bad things from happening.
WHY ARE COMPANIES USING THE HAAS MODEL?
The HaaS model is essentially a way to handcuff a customer to a specific piece of hardware and software for, well, forever. It makes it very difficult for the customer to head in a different direction if they want to switch products, services, or providers.
It has become prevalent as of late, particularly in the security industry and with companies like Latch (smart building technology), Verkada (surveillance cameras), and Cisco Maraki (Wi-Fi).
You see, companies who utilize HaaS pricing models pitch the low churn rate to investors to make their products and services seem more attractive. Churn is a term that describes customer cancellations.
The churn rate for HaaS-based products and services is usually meager, typically close to 2%. Unfortunately, this is because the customer has no say in the matter and is essentially tethered to the product they have purchased. Even if they believe they are receiving terrible customer service, they stay with the HaaS provider because they don’t want to be forced to buy an entirely new system.
But, what exactly makes it so difficult for customers to get out of the HaaS model? Why can’t they just cancel their subscriptions?
Well, you see, canceling the subscription isn’t the tricky part. The problem is, if you cancel it, the company you were paying will send out a command, rendering your devices useless. In the case of security devices, like cameras, you had to pay someone to install them onto your property, and now, you have to pay someone again to uninstall them.
Then, you have to replace those cameras with new cameras, pay to have the new cameras installed, and learn a new software program. That sounds like a major hassle, doesn’t it? It costs a boatload of money just to get rid of those cameras and switch providers.
That’s how these companies keep you “hostage.” Most people realize how difficult it is to get out, decide they don’t want to spend all that money or take on that headache, and keep paying the subscription fee for substandard service and technology.
After all, if you stop paying the fee, your devices will be useless. So, why not keep paying it? It’s undoubtedly the easiest thing to do. However, by settling for a security system that is not getting the job done you are putting your people and property at risk. We don’t think you should be forced to make that choice.
HOW DOES WATCHMEN SECURITY VIEW THE HOSTAGE-AS-A-SERVICE MODEL?
Watchmen Security is not a fan of this business model. Our goals are to help our customers, provide them high-quality services and products, and keep them safe, not twist their arms and take advantage of the business they’ve provided us.
“At Watchmen we believe it is our duty to serve the customer and give them a great experience with excellence. We are not insecure as a service provider and feel it is not necessary to lock in our clients by selling them a solution that they will have a very hard time getting out of.” – Lucas Ingala, Founder/CEO, Watchmen Security Services
Unless you see the HaaS business model as a good fit for you, we implore you to make sure your voice is heard. Don’t give these businesses your money, as they are not in it for your benefit. You deserve to have a choice who provides the software and service after the sale.
If you are in the market for top-of-the-line security systems, including video surveillance cameras and access control technology, that won’t tie you down with a recurring fee just to keep them working correctly, talk to the team here at Watchmen Security.
For years, we have been a trusted security service provider in the Kansas City region. Give us a call at (913) 578-9085 if you live in Kansas or (816) 670-4353 if you live in Missouri. We’re here to keep you and the ones you love safe!
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