Servitization moves to discrete manufacturing

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IoT, cloud, and artificial intelligence provide a pathway to recurring revenue

The first subscription model was introduced in 1962 and it was not in retailing. It was in the airline industry. Technology challenges in the 1960s prevented subscriptions for asset management from scaling up, but new advances in IoT, cloud, and Intelligent Industry mean the move towards the Equipment-as-a-Service (EaaS) model is possible.

Most companies have a one-time sales model with a simple transaction: the customer pays the seller for a product. Manufacturers need more than one-time sales. They should look to services to generate revenue.

EaaS not only benefits the OEM with increased share of revenue but also provides the customer the opportunity to reduce its operating cost. The key for EaaS is the ability for the equipment rental to provide remote management. The platform needs to be built with a solid understanding of the IT landscape and how to integrate features into the current portal.

EaaS will transform business models and risks will need to be addressed. Capgemini developed an EaaS platform that allows for a smooth transition to a subscription model.

Read how to make EaaS successful in Recurring income from equipment increases revenue and improves cashflow.

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Servitization moves to discrete...

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