There are so many different acronyms out there in the business world that it’s easy to get lost in the confusion. One acronym that has steadily been gaining notoriety is that of EaaS, or Equipment as a Service. Read on to find out more about what EaaS is and how it may apply to you.
What is Equipment as a Service?
EaaS is a specific business model that focuses on renting out equipment and heavy machinery to companies and then receiving periodic payments for the use of it.
What Are the Use Cases for EaaS?
You may be wondering why companies don’t just purchase the equipment themselves instead of renting it from another company. There are actually quite a few reasons for companies to invest in EaaS companies. One of the biggest is the relation of EaaS to industry 4.0. Since manufacturers are focusing on smart manufacturing and improving operations, quality, machine health through the use of cloud computing, EaaS has taken on a few different models in the industry.
One model is that OEMs and manufacturers are outsourcing their equipment to their customers for small periods of time. Some clients don’t have the funds to pay for the equipment, so they allow those clients to come into their facilities to use the equipment. Usually, payment is done in a subscription fashion, or as a percentage of final sales made when using the machinery.
The most common model, however, is where OEMs and manufacturers provide their equipment to enterprise companies, allowing the equipment to be relocated to the enterprise company’s facility, and having payment come through the form of a subscription. The OEM will lease out the machine for a specific amount of time, and they will be responsible for maintenance and repair. There is also the ability for the OEM to collect equipment data for R&D or predictive maintenance in the future.