Equipment-as-a-Service (EaaS): A Groundbreaking Business Model
Equipment-as-a-Service (EaaS) represents an innovative approach that replaces the traditional purchasing of machinery and production systems. Instead of acquiring machines, companies rent them for a fee and receive comprehensive service packages. EaaS enables businesses to reduce costs, minimize risks, and improve efficiency. This article examines the benefits, challenges, and future prospects of EaaS.
Definition and Operating Principles
Under the EaaS model, the manufacturer retains ownership of the machine and makes it available to the customer. Maintenance, spare parts, and consumables are provided by the manufacturer, who also guarantees availability. Payment is based on a pay-per-use model or a fixed monthly fee. This approach ensures consistent revenue for the provider while strengthening customer loyalty. Customers benefit from flexible usage without the need for significant upfront investments.
Benefits of EaaS
- Comprehensive Service Solutions: Customers receive not just machinery but a holistic solution for their production processes, relieving them of maintenance and repair responsibilities.
- Recurring Revenue: Providers gain stable and predictable income streams through pay-per-use or subscription models.
- Enhanced Customer Retention: Ongoing interaction fosters stronger relationships between providers and customers.
- Increased Customer Lifetime Value: Regular, recurring revenues enhance customer lifetime value while creating more opportunities for cross-selling and upselling.
- Greater Transparency: Manufacturers gain detailed insights into how customers use their machines, enabling them to identify problems and optimize their offerings.
- Risk Mitigation: Customers transfer operational risks to providers and benefit from predictable costs.
- Sustainability: Extended machine lifecycles save resources and reduce CO₂ emissions.
Disadvantages of EaaS
- Upfront Investments: Providers face significant initial investments before generating revenue. Partnering with financial institutions can help mitigate this risk.
- Responsibility for Downtime: Providers must ensure maximum availability and minimize downtime through efficient maintenance cycles.
- Adjustments to Sales and Billing Processes: Processes need to be automated and tailored to the specific requirements of the model, including metrics such as churn rate, lifetime value, and customer acquisition costs.
- Data Security Concerns: Uncertainties around data usage may hinder acceptance.
- Complex Implementation: Sales teams require training, commission models need adjustment, and billing cycles must be accurately aligned and adapted monthly.
Key Success Factors for EaaS
A study conducted by Munich University with 322 participants identified six critical success factors for the adoption and promotion of EaaS:






Requirements for Manufacturers
Digitization and automation are critical for ensuring process efficiency and financial viability.
- Digitization – 74.5 % of respondents agree that adopting EaaS depends on a company’s level of digitization. End-to-end processes must seamlessly connect ERP systems with customers’ production machinery.
- Predictive Maintenance – Analyzing machine data to anticipate wear and maintenance needs enhances service planning, reduces costs, and addresses labor shortages.
- Smart Customer and Service Portals – These portals integrate IoT with ERP systems, offering features like self-service options, documentation, and ticketing, while improving customer satisfaction through automation.
Examples of Companies offering EaaS
TRUMPF
With its “Pay per Part” model, TRUMPF allows customers to use automated production systems without purchasing them, charging only for each produced part. This model supports production planning and remote maintenance, enhancing financial flexibility and addressing labor shortages.
Heidelberger Druckmaschinen AG
In collaboration with Munich Re, Heidelberg offers a “Subscription Plus Model” where customers pay per printed sheet. This package includes machines, software, consumables, and services, enabling flexible and efficient production goals.
Kaeser Kompressoren
Charges customers based on actual compressed air usage, covering installation, maintenance, and energy optimization.
Rolls-Royce
Offers a “Power-by-the-Hour” model for aircraft engines, charging airlines per operational hour while ensuring maintenance and operational security.
Conclusion
Equipment-as-a-Service (EaaS) is emerging as a transformative business model in the industrial equipment sector, offering significant benefits for both providers and customers. Its adoption is fueled by digitization and sustainability efforts. However, challenges such as data security and knowledge gaps must be addressed to achieve widespread acceptance and successful implementation. Despite these hurdles, the strong endorsement from companies highlights EaaS as a cornerstone of Industry 4.0.
Silke Hänisch, Market Intelligence Senior Expert
Sources:
- Cloudflight (2020/2021)
- Siemens
- HM Munich University (2021)
- Relayr
- Mittelstand-heute (2024)