IoT Analytics
Assembly Line
OEM servitization strategies: Why Equipment as a Service hasn’t taken off yet
In 2020, IoT Analytics questioned whether we were witnessing the start of the machine-outcome decade (the 2020s), where assets are not purchased as capital expenditures (CapEx) but, instead, are paid for on an outcome basis as operational expenses (OpEx). Moving from CapEx to OpEx helps companies with limited access to capital access equipment without a large upfront investment, and assets with unpredictable usage could be more cost-effective since the companies would only pay for what they use.
According to our latest research on the topic—the 147-page Equipment as a Service Market Report 2024–2028—the concepts of “equipment as a service” and “pay-per-use” have not taken off as much as expected, even though the greater subscription economy has. IoT Analytics’ estimates the adoption of “as-a-service” models is less than 1%—meaning that less than 1% of equipment sales in 2023 (machines, electronics, electrical equipment, etc.) was achieved with EaaS contracts.