Role of IoT in Driving the Growth of Equipment-as-a-Service

The Internet of Things (IoT) has been poised to offer significant growth to almost all the major industry in upcoming years. Recent research reports suggest that the companies vending IoT solutions may experience revenues of around $450 billion. It is also predicted that by the end of 2025 there will probably be 75.4 billion connected devices across the globe, offering a robust market for the growth in several industries. Alike others the manufacturing industry also has a lot of opportunities for improving the uptime for customers along with reducing expensive repairs.

Digitalization and disruption have been offering opportunities to the companies along with innovative models for new business for entering markets. One new business model that exhibits great potential is integrating IoT technology & equipment with the aspects of SaaS (software-as-a-service) models. 

The arrival of cloud computing made SaaS popular. It delivered the users with the software access for a subscription fee, with a software company that can handle maintenance, renovations as well as security concerns. This idea has now grown into a broad range of IT and other areas. For instance, from another industry, Netflix offers video as a service via monthly subscription fee.

The SaaS model is now being applied to a wide range in other industries. Several industries have frequently been using the service agreement or lease models for Equipment. Nevertheless, these models have had their own problems. These include, clients often don’t catch early warning signs of the equipment having issues, the maintenance schedule may not be appropriate to the client’s site conditions, and even the equipment may be more than the end user needs. For whatever reason, service contracts can be expensive on both sides.

Equipment-as-a-service leveraging the IoT technology and business models is benefiting both equipment manufacturers and businesses. As equipment-as-a-service (EaaS) option works on a monthly subscription basis, the business can subscribe for the required machinery on a monthly basis for which they pay monthly fee for the usage of the machinery, depending upon the machinery outcome. And if the company is not getting the desired outcome with the machinery they can end the subscription span without the need of paying any penalty.

On the other hand the subscriber gets sensors installed integrating it with the IoT technology, allowing them to monitor their equipment remotely. Moreover, with the help of sensor they can easily determine the necessity for the preventative maintenance in advance and can schedule the maintenance depending upon the time availability of both companies.

Equipment-as-a-service offers boundless options for both equipment manufacturers as well as businesses. By the means of integrating IoT technology with equipment, a number of companies are gaining a better uptime deprived of any heavy investment. In addition, equipment companies are even at profits owing to the lower rates of failure, since the equipment is being serviced before getting worse. Also, IoT technology is anticipated to enhance approx. $10 & $15 trillion to the global GDP by the end of 2030.