Equipment as a Service (EaaS) is a major paradigm shift for many enterprises in the industrial sector. More and more industrial companies have started to bundle their products with services and offer product-service systems. Thereby, they do not only sell equipment, but offer comprehensive solutions that solve customer problems.
Compared to service contracting business models that rely on complete outsourcing, EaaS is generally not about outsourcing an entire equipment operation. Ultimately, EaaS providers enable their customers to focus on the core operation of their equipment. With ongoing digitization and automation however, borders between EaaS and complete outsourcing can become increasingly blurred.
EaaS did not just emerge. There are well-established EaaS business models, such as Rolls-Royce’s jet engine as a service dating back to the early 1960s or Xerox’s copier as a service going back to the late 1960s. But only recently has EaaS gained momentum through the advent of the Internet of Things – a catalyst for new services and service-oriented business models. Thus, most companies are just beginning to investigate EaaS business models and still have to explore its art and science.
By analyzing over 200 manufacturers that offer EaaS, we have identified 66 fundamental patterns that are core to EaaS business model innovation. This knowledge is what we share with The St. Gallen EaaS Navigator. Not all patterns will be helpful for your business and the patterns are certainly not exhaustive. But we believe that every manager should be aware of them in order to sustain competitive advantage.