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Introduction
In our previous article, "Tech & EaaS: Investing inthe Right Tech Stack for EaaS and PaaS in Industrial Markets", we explored the challenges industrial businesses face when transitioning to an "as-a-service" model and outlined strategies to navigate the investment dilemma. One of the key takeaways was that choosing the right technology stack is crucial for success—but how do companies go from identifying the need to actually implementing these solutions?
This article takes the conversation one step further, offering a practical guide on the core technological components needed to support a scalable and efficient EaaS or PaaS business. Whether a company is launching a pilot, scaling incrementally, or undergoing a full transformation, understanding how to leverage IoT connectivity, data analytics, metering solutions, entitlement management, and billing systems is key to unlocking the full potential of the as-a-service model.
IoT connectivity: Enabling real-time data collection
A fundamental pillar of the EaaS and PaaS business model is real-time equipment monitoring. Without the ability to continuously track machine usage, performance, and maintenance needs, it would be impossible to offer pay-per-use, outcome-based pricing, or predictive maintenance.
To enable this, industrial businesses must integrate IoT (internet of things) connectivity into their products. This involves equipping machines with smart sensors that collect data such as operating hours, energy consumption, wear and tear, and environmental conditions (temperature, humidity, pressure, etc.).
The collected data is either processed at the edge (on the machine itself) or transmitted to cloud-based platforms, where it can be analyzed to generate actionable insights. With automated alerts, equipment providers can identify potential failures before they occur, ensuring uptime for customers and reducing downtime-related costs.
A real-world example of this is in CNC machining-as-a-service, where IoT sensors measure spindle rotation, vibrations, and coolant levels. If an abnormal pattern is detected, the system triggers an alert, allowing for maintenance before a failure occurs—preventing expensive disruptions for the customer.
Data analytics platforms: Turning raw data into actionable insights
Collecting machine data is only the first step. The real value comes from processing and analyzing this data to extract insights that drive better decision-making. This is where data analytics platforms play a crucial role.
Advanced analytics platforms use AI (artificial intelligence) and machine learning (ML) to analyze usage trends, detect anomalies, and predict when equipment may require maintenance. This allows businesses to transition from reactive to predictive maintenance models, improving service efficiency and reducing maintenance costs.
Another key application of analytics in EaaS is the use of digital twins—virtual replicas of physical equipment that simulate "what-if"scenarios. For example, an HVAC company offering cooling-as-a-service (CaaS) can use digital twins to predict how different environmental conditions impact energy consumption, optimizing cooling efficiency in real time.
Additionally, analytics platforms help businesses understand customer behavior, allowing them to tailor service packages and upsell additional features based on actual customer needs. Companies that fail to leverage data analytics risk falling behind competitors who can provide more optimized and cost-efficient service models.
Metering solutions: Enabling usage-based and outcome-based billing
A key differentiator of EaaS and PaaS models is the shift from fixed pricing to metered or pay-per-use pricing. Unlike traditional sales models, where the customer purchases a machine upfront, EaaS models require precise tracking of how much the equipment is used or what output it generates.
Metering solutions ensure accurate tracking of machine hours, energy consumption, production output, or other relevant metrics that form the basis for pay-per-use or outcome-based billing. These meters, integrated with IoT connectivity, automatically collect and transmit usage data, eliminating the risk of human error in manual data entry.
For example, in printing-as-a-service, companies do not sell printers but instead charge customers per page printed. This requires highly precise metering technology that ensures customers are only charged for what they use.
Metering solutions also play a crucial role in preventing revenue leakage. Without proper tracking mechanisms, businesses run the risk of undercharging customers or failing to capture the true value delivered.
License and entitlement management: Controlling access and service levels
In an EaaS model, not all customers require the same level of access to a product or service. Some may only need basic features, while others require advanced functionalities, premium service levels, or additional support options.
License and entitlement management systems ensure that customers only access the features and service levels they have paid for. This is particularly important in software-driven industrial solutions, where specific capabilities can be activated or deactivated remotely.
For instance, a robotics manufacturer offering robotics-as-a-service may provide basic automation features in the standard subscription but offer advanced AI-powered motion tracking as an additional paid feature. License management systems allow the manufacturer to dynamically upgrade, downgrade, or suspend access based on the customer’s subscription level.
Additionally, these systems enhance security and compliance by preventing unauthorized usage. With role-based access control, businesses can ensure that only authorized personnel can configure or operate high-risk machinery, reducing liability concerns.
Billing and invoicing systems: Handling complex monetization models
One of the biggest challenges for industrial businesses shifting to subscription-based models is managing complex billing scenarios. Traditional one-time sales models involve simple transactions, but EaaS and PaaS require recurring billing, pay-per-use charges, multi-currency transactions, and tax compliance.
Modern billing and invoicing systems are designed to handle:
- Recurring subscriptions: Monthly, quarterly, or annual billing cycles.
- Usage-based billing: Charges based on real-time usage data collected from metering solutions.
- Outcome-based billing: Charges based on equipment performance or delivered outcomes.
- Multi-currency and tax compliance: Ensuring global compliance with tax regulations across different regions.
For example, in agricultural equipment-as-a-service, a manufacturer may charge farmers based on acres plowed or tons of crops harvested. The billing system must be able to automatically calculate the charges based on real-time data, generate invoices, and integrate with ERP (enterprise resource planning)systems for revenue recognition.
Without a robust billing system, companies risk billing errors, delayed revenue collection, and dissatisfied customers—all of which can severely impact profitability.
Conclusion: Tailoring the tech stack to fit business needs and budget
Not all companies have the same starting point when transitioning to EaaS or PaaS. While some businesses may have the resources to fully integrate new technologies from day one, others may need a phased approach to minimize risk and investment.
Some companies opt for a spin-off or start-up model, allowing them to develop the "as-a-service" model with a leaner, more agile approach, separate from their core business. This can accelerate market entry without requiring a full-scale transformation of legacy operations.
At P2S, we understand that every manufacturer has different needs and constraints when moving to an "as-a-service" model. This is why we tailor technology investment plans based on the company’s stage in its servitization journey. Our approach is designed to help businesses:
- Start small, scale smart—launching EaaS with targeted investments in IoT, analytics, and metering before rolling out full integration.
- Leverage subscription-based technology—adopting flexible tech solutions that grow alongside the business without requiring heavy upfront CAPEX.
- Integrate with existing infrastructure—ensuring a smooth transition by connecting new solutions to legacy CRM, ERP, and financial systems.
Investing in the right tech stack is not just about avoiding pitfalls—it’s about unlocking new revenue streams, improving operational efficiency, and staying ahead of industry disruption. By taking a structured, tailored approach, manufacturers can transition to EaaS and PaaS in a way that fits their strategy, budget, and long-term vision.
At P2S, we help companies navigate this transformation with pragmatic, scalable solutions that align with their financial and operational goals.Whether it's testing the waters with pilot projects or building a full-scale subscription-based model, we guide businesses in choosing the right technology at the right time—maximizing value at every step of the journey.
