28 September 2014

EaaS 101: Enables control, equipment assets turn into services


Equipment-as-a-service or EaaS is rapidly moving from a specialized notion pioneered by the providers of medical and other specialized devices to general adoption. Thanks to the ease of connecting all sorts of equipment and devices in the internet of things (IoT), EaaS is also becoming more feasible and affordable. Today, EaaS is poised to make rapid inroads into complex building systems, such as high-rise elevators or HVAC, as well as manufacturing environments.

When you look at equipment and machinery around you, do you see static assets that need repair and servicing from time to time? Or do you see services whose main value is to provide what people and companies want to accomplish, and equipment and maintenance are both a part of that? In many companies, the view of equipment and services is rapidly and dramatically changing.

The makers of high-end, business-critical equipment used, for instance, in manufacturing, oil and gas exploration, mining, and construction, have long sold equipment together with service contracts. For the customers using these machines, an interruption to their functioning would seriously compromise their ability to deliver to their customer commitments, so they pay for scheduled and emergency maintenance and repair in addition to investing in the purchase of the equipment.

EaaS takes a step beyond that with more effective operations and a simpler financial model. Companies’ primary interest is the ability, for example, to manufacture parts for jet engines. Instead of making a large investment in machinery, they pay the vendor a fee for delivering that ability at a certain service level. Equipment and equipment maintenance are essential components within that service. The vendor generates recurring revenue and may be able to build a larger business from services, parts, and materials.

To make this work, you need to be able to rely on your vendor’s uncompromised uptime commitment. The vendor has to perform regular preventive maintenance, and also needs to be aware of materials and parts that are not performing to expectations and are at risk for failure, so they can be replaced or repaired. That, in turn, requires timely, accurate intel from and about the critical equipment assets. Connected sensors within the internet of things can gather and transmit detailed data that tell the service provider about the performance, material conditions, operational details, and location of the equipment, enabling proactive maintenance. If EaaS is implemented with the proper business intelligence, well-maintained equipment may be productive much longer and failures will be rare. EaaS providers will also be able to gather data from customer sites that help them improve their designs to make machinery more robust and better-performing. Equipment data will also make it easier to assess the costs and operational impact to decide how long machinery should be maintained and repaired, and when it’s better to replace it. Eventually, to the benefit of both EaaS vendors and their clients, maintenance and repair costs can go down.

To-Increase customers are working toward EaaS at their own pace and are looking to us to support both Eaas and the internet of things. For the moment, it looks like the best fit for EaaS is with the large, industrial manufacturers and the companies that so far have provided them with equipment. We have already seen quite a few customers take advantage of the internet of things to speed design and manufacturing cycles. Adopting Eaas as a vendor or consumer of equipment services is a logical next step for many of them.

If you see a need or have an interest in the new EaaS model, I’d love to hear from you. Get in touch with me or simply contact To-Increase.

Luciano Cunha
Luciano Cunha,
Luciano Cunha,
Chief Executive Officer (CEO)

Also interesting