Equipment-as-a-Service Offers New Options for Manufacturers
The Internet of Things (IOT) is poised to deliver significant changes to many industries in the next few years. Silicon Valley experts Bain & Company predict that companies selling IoT solutions will see revenues increase to over $450 billion in the next 3 years. Incredibly, worldwide there will be 75.4 billion connected devices by 2025. This disruptive change to the market is opening up new opportunities to the manufacturing industry.
Digitization is adding another layer of opportunity for manufacturing companies to develop revolutionary new business models to the market. One new business model that is showing great promise is applying the software-as-a-service (SAAS) business model to provide IoT technology to equipment manufacturers.
SAAS became popular with the development of cloud computing. Basically, SAAS business models offer users with software access for a subscription fee. Netflix was an early adopter; today, thousands of subscription software service applications (apps) are available to businesses and end-users alike. One of the main advantages of SAAS services is that the company manages upgrades, maintenance and security issues.
Today, the “as-a-service” model is being applied to many industries, including equipment manufacturers and distributors. This model benefits end-users significantly. Equipment-as-a-service subscriptions offer companies the ability to:
- Inspect and catch early warning signs that the equipment is breaking down or having problems
- Follow a maintenance schedule on time
- Offer short or long-term subscriptions
- Offer service adjustments that better suit the customers’ needs.
Equipment-as-a-service offers new options for both equipment manufacturers and businesses. Many companies are gaining better uptime due to the integration of IoT technology without a heavy investment. Equipment companies are increasing their profits due to the lower failure rate of the equipment because the equipment is being serviced before problems spiral out of control.
March & McLennan Agency (MMA) is dedicated to addressing the needs of manufacturing businesses in the U.S. and around the world. We offer the industry knowledge and expertise needed to tailor a risk management program that produces meaning solutions.
Contact us here to learn how MMA can help your manufacturing business.