TaaS is a payment program that allows you to bundle your technology hardware equipment and the valuable multiyear support and maintenance services needed, all for one convenient monthly subscription payment. This approach provides exclusive protection, flexibility, and control needed to operate efficiently, be agile in the marketplace, and stay competitive. It is not a dressed-up lease, but a real technology-as-a-service program that helps you stay at the forefront of technology and provides greater flexibility to easily upgrade and scale.

Difference between TaaS and Traditional Financing:

The main difference between TaaS and traditional financing is the ownership of the technology. In traditional financing, you purchase the technology and own it, whereas in TaaS, you subscribe to a service that provides the technology you need without the need for ownership. This means that with TaaS, you can easily upgrade or scale your technology as needed, without the financial challenges associated with purchasing new solutions.

• Favorable Economics: TaaS creates favorable economics by absorbing the myriad of non-recoverable costs associated with acquiring new technology while maintaining the ability to keep your working capital working.

• Embraces Technology Change: TaaS embraces the rapid advancement of technology and the risk of obsolescence by offering the Solution Replacement Guarantee, which allows you to migrate into new technology at any time during the subscription service term, without financial penalty.

• Peace of Mind: TaaS provides peace of mind by allowing integrators to combine and offer their service agreements as one monthly subscription cost with the hardware. This removes most additional service expenses throughout the subscription term.

• Act of God Coverage: TaaS protects you from unforeseen expenses should a natural disaster situation occur.

TaaS works by bundling the hardware equipment and support services into one all-inclusive monthly subscription payment for 36 or 60 months. This includes the hardware equipment and support services to ensure your solution is serving you optimally. The exclusive features of Innova's AsOneSource 's TaaS include the Solution Replacement Guarantee, Act of God Coverage, and Multiyear Support Services.

The tax advantages of TaaS are significant. When you purchase technology equipment, you need to add it to the assets under your normal business insurance coverage. In the event of damage due to an act of God, your insurance will cover the damage, but there is almost always a deductible. With TaaS, the Act of God coverage can help reimburse your insurance deductible expense up to a maximum of $5,000 per contract term.

Tax Advantages of Technology-as-a-Service (TaaS):

• Operating Expense vs. Capital Expense:

  • Traditional Financing: When you purchase technology equipment, it is considered a capital expense. This means you need to capitalize the asset and depreciate it over its useful life.

    1. TaaS: With TaaS, the monthly subscription payments are considered operating expenses, which can be fully deducted in the year they are incurred, potentially providing a more favorable tax treatment.

• Impact on Balance Sheet:

  • Traditional Financing: Purchasing technology equipment adds assets to your balance sheet, which then need to be depreciated over time. This can affect your company's financial ratios and borrowing capacity.

    1. TaaS: Since you are not purchasing the equipment, there are no assets to add to your balance sheet. This can improve your financial ratios and potentially enhance your borrowing capacity.

• Cash Flow Management:

  • Traditional Financing: Purchasing technology equipment requires a significant upfront investment, which can impact your cash flow.

    1. TaaS: The monthly subscription payments spread the cost over time, preserving cash flow and working capital for other strategic investments.

• Tax Deductible Expenses:

  • Traditional Financing: Depreciation on the purchased equipment can be claimed as a tax-deductible expense, but this is spread over the useful life of the asset.

    1. TaaS: The entire monthly subscription payment is typically tax-deductible in the year it is incurred, potentially providing a more immediate tax benefit.

• Avoidance of Alternative Minimum Tax (AMT):

  • Traditional Financing: Depreciation deductions can sometimes trigger the Alternative Minimum Tax (AMT).

    1. TaaS: Operating expenses, like the TaaS monthly subscription payments, do not trigger the AMT.

• Flexibility for Future Upgrades:

  • Traditional Financing: Upgrading technology before the end of its useful life can result in a loss on the disposal of the old equipment.

    1. TaaS: The Solution Replacement Guarantee feature of TaaS allows you to upgrade technology without financial penalty, ensuring you always have access to the latest technology without worrying about the tax implications of disposing of old equipment.

• Act of God Coverage:

  • Traditional Financing: Insurance deductibles for damage due to natural disasters are an out-of-pocket expense for the business.

    1. TaaS: The Act of God coverage in TaaS can reimburse you for insurance deductibles up to $5,000 per contract term, providing additional financial 

• Scalability and Flexibility:

  • TaaS allows businesses to scale their technology solutions up or down based on their needs. This is particularly beneficial for companies that experience seasonal fluctuations or are in a growth phase.

• Access to the Latest Technology:

  • TaaS ensures that businesses always have access to the latest technology without the need for significant capital investment. This is crucial in today's fast-paced business environment where technology is constantly evolving.

• Simplified Vendor Management:

  • With TaaS, businesses typically deal with a single vendor for their technology needs, simplifying vendor management and reducing administrative overhead.

• Predictable Budgeting:

  • TaaS provides businesses with predictable monthly costs, making budgeting easier and reducing the risk of unexpected expenses.

• Enhanced Security:

  • TaaS providers often offer enhanced security features as part of their service, ensuring that businesses have access to the latest security technology to protect their data and infrastructure.

• Improved Collaboration and Productivity:

  • TaaS can facilitate collaboration and improve productivity by providing access to the latest collaboration tools and software.

• Reduced IT Staffing Costs:

  • With TaaS, businesses can reduce their IT staffing costs as the TaaS provider typically handles maintenance, updates, and support.

• Environmental Benefits:

  • TaaS can contribute to sustainability efforts by ensuring that technology equipment is properly recycled or repurposed at the end of its life cycle.

• Enhanced Customer Experience:

  • By leveraging the latest technology, businesses can enhance the customer experience, leading to increased customer satisfaction and loyalty.

• Global Reach:

  • TaaS can facilitate global expansion by providing access to technology solutions that support multiple languages and comply with local regulations.

The Solution Replacement Guarantee

The Solution Replacement Guarantee (SRG) offered by Innova's AsOneSource  in their Technology as a Service (TaaS) program provides customers with a significant degree of flexibility and control to address their changing technology needs without financial penalty. Here's how it works:

• Understanding SRG:

  • From the first day of the TaaS subscription to the end of the term, customers can change their technology solution without any financial penalty.

  • This means customers can replace their original solution and subscription with a new one at any time without being responsible for remaining monthly payments on the original term.

  • This is a significant advantage over other payment methods for technology solutions.

• Guidelines for SRG:

  • The current solution no longer meets the customer's needs or the customer requires different functionality that the current solution cannot provide.

  • Innova's AsOneSource  needs to verify the SRG request.

  • The new subscription term length must be equal to or greater than the original term.

  • The new subscription payment must be equal to or greater than the original payment.

  • The customer must be approved for the new agreement.

  • The customer must work with the original Innova's AsOneSource  partner for the new solution.

 TaaS in Action:

• • Solution Replacement Guarantee: A customer acquires a technology solution with a Innova's AsOneSource  technology-as-a-service subscription agreement. 

  • 30 months into the 60-month term, the customer needs technological capabilities that the original solution cannot provide. The customer exercises the Solution Replacement Guarantee to easily transition to the new technology without the typical financial headaches associated with acquiring new solutions.

  • Act of God Coverage: A customer experiences a lightning strike that causes $20,000 of damage to the equipment in their technology-as-a-service solution. Their insurance company covers the damaged equipment with a $3,000 deductible being the responsibility of the customer. The customer submits the details of the incident to Innova's AsOneSource , and Innova's AsOneSource  reimburses the customer their $3,000 deductible expense.

• Example Scenario:

  • A customer acquires a technology solution with a Innova's AsOneSource  TaaS subscription agreement for 60 months at $1,038 per month.

  • 30 months into the term, the customer's needs change, and they require a new solution that costs $75,000.

  • The customer decides to exercise the SRG to transition to the new technology without the typical financial headaches associated with acquiring new solutions.

  • The remaining 30 months of payments on the original subscription, totaling $31,140, are forgiven.

  • The old subscription is replaced with a new subscription, and the customer's monthly payment changes from $1,038 to $1,557 for the new solution.

  • The customer has no responsibility for the remaining payments on the original subscription.