Industrial and Commercial Machinery Manufacturers Embrace the Product-as-a-Service Revolution

User Review
0 (0 votes)

ICMManufacturersEmbracethePaaSRevolution-1What is Product-as-a-Service and How Does it Affect Equipment Manufacturers?

Over the last several years, Product-as-a-Service (PaaS) has gained momentum. And while PaaS may look slightly different to different businesses and industries, it is revolutionizing the equipment manufacturing industry.

In short, Product-as-a-Service is a business model that enables customers to buy their desired result rather than purchasing the equipment that creates the result. For example, if a customer wants two pieces of metal welded together, in the past, he or she would buy a welding robot, but in the PaaS model, the customer will purchase a certain number of welding operations rather than the robot itself.

So, what do Industrial and Commercial Machinery manufacturers need to know about the Product-as-a-Service revolution? Keep reading to find out!

Changing Customer Needs

Essentially, PaaS shifts the risk of performance from the customer to the manufacturer. There is an increasing emphasis on improving customer service in the manufacturing industry, and PaaS is an addition to this emphasis.

A short time ago, customers preferred owning their assets because it provided them with a feeling of control; however, recently, customers are increasingly looking for usage-based pricing over ownership. Consumers no longer feel threatened by leasing or renting equipment. In fact, PaaS delivers peace of mind, flexibility, and convenience and strengthens the overall customer experience.


Product-as-a-Service starts to fully utilize the Internet of Things (IoT). New low-cost sensors and wireless communication capabilities provide industrial machinery companies with a real-time understanding of asset performance not previously available. IoT devices utilize data analysis and remote monitoring to facilitate productivity through predictive maintenance that minimizes downtime and makes PaaS possible.

IoT is hugely impactful; the IDC predicts 41.6 billion IoT devices will be deployed by 2025. And PaaS will continue to grow as it leverages IoT technology to generate value. This IoT technology will make PaaS available for everything, including valves, robots, wind turbines, and even washing machines. And because it’s a service, customers pay for only what they use.

Benefits for Clients and Manufacturers

For both the manufacturer and the client, PaaS proves advantageous.

As we touched on earlier, PaaS delivers peace of mind and flexibility for the client. Plus, the client no longer assumes the risks associated with the product’s performance, meaning they no longer must worry about system maintenance and upkeep. Additionally, the cost of purchasing a huge robot or piece of machinery transforms into smaller usage-based operating expenses.

Moreover, PaaS is a more durable business model as manufacturers achieve a more constant stream of revenue. This approach, further, allows manufacturers to target consumers with personalization. Not only does PaaS deliver new revenue streams for manufacturers but it also reduces costs by minimizing waste throughout the supply chain. Finally, the IoT technology enables users to monitor the product’s field reliability, so manufacturers can use that data to improve the product’s value.

What’s Next for PaaS?

Moving forward, what comes next for the Product-as-a-Service revolution? Businesses who harness this technology, especially those who integrate it with their existing systems, will drastically outshine their competitors who have yet to use this transformative business model.

For example, businesses have the opportunity to use this data and understand it with Business Intelligence (BI) tools to see trends of usage, informing them about which products are performing better than others, and allowing them to make better product development decisions. These businesses can then start to use this data in conjunction with new AI capabilities to more effectively handle complex customer service support inquiries, even during off hours.

These are only a few of the benefits of utilizing IoT technology to implement the Product-as-a-Service business model for Industrial and Commercial Machinery manufacturers.

Contact Datix today to put your business on this path to leverage this Industry 4.0 technology and significantly jump ahead of the competition!