Equipment-as-a-Service – necessary changes for service-based business models

Abstract

Everything-as-a-Service (XaaS) describes a paradigm in which all resources of an ecosystem are offered as services. If this approach is applied in the manufacturing industry with physical goods such as machines or equipment, we talk about Equipment-as-a-Service (EaaS). Depending on the value proposition of the EaaS, a distinction can be made between availability, utility, result, and success centric EaaS business models. For example, in availability centric EaaS business models, the value proposition consists of the availability of a service with agreed performance standards, with the billing parameter being the time in which it is being made available. In dependency of the value proposition the service provider takes over several risks. One risk he always must take over is the investment risk for the equipment To be able to realize the value propositions listed above and to assess and take over the risks, there is a need for change in the company of the provider. This work shows this need for change as a basis for the planning and implementation of EaaS services.To identify the need for change we conducted three workshops of 120 minutes each with 7 small and medium-sized enterprises (SME) from the field of mechanical and plant engineering to develop one of their transactional business models conceptually into an EaaS business model. The methodical approach of the workshops followed three phases which are necessary for the development of an EaaS business model: (1) target group orientation, (2) EaaS service and delivery and (3) benefit and pricing model. In the first phase, the focus is on the target group and its needs, which shall be satisfied with an EaaS service. The second phase focuses on the EaaS itself, which consists of physical and digital service components. In addition, the own organizational and technical as well as the cooperative structures required for the service provision are considered. In the third phase, a subscription-based pricing model must be developed based on the provided benefits.The results show that understanding EaaS users is fundamental in the development of an EaaS service. Since these are a combination of physical and digital service components, they can be designed very individually to meet the customer needs. This combination means that different types of users can and should be addressed in a company. This requires the development of additional services and the definition of performance guarantees, whose fulfillments should be made transparent to the service user. To do that corresponding technical and organizational measures are necessary, for which, for example, the digital support of administrative processes by monitoring systems or the change in sales or product management is required. If these requirements cannot be met with the company's internal structures, strategic partnerships with insurance companies, banks or IT providers are necessary to support the EaaS provider. All these changes require not only technological and organizational adjustments but also new pricing models, which are reflected in new methods for price calculation and usage assessment.