The XaaS Maturity Model in Manufacturing: A Strategic Framework for As-a-Service Transformation

For manufacturers considering the shift to As-a-Service (XaaS) models, the first question is often: Where do we start? Should the focus be on connected services, software, or full Equipment-as-a-Service (EaaS) offerings? The answer is not one-size-fits-all. Transitioning to a subscription-based model requires a structured, strategic approach that balances customer demand, technological readiness, and business complexity.

At P2S Management Consulting, we have identified six key XaaS maturity levels to guide manufacturers on their journey from internal efficiency improvements to full-scale subscription platforms. Each step builds on the previous one, allowing companies to crawl before they run—learning critical As-a-Service principles while progressively expanding their subscription capabilities.

By following this phased approach, manufacturers can reduce risk, accelerate adoption, and maximize revenue potential while ensuring that their sales teams, service partners, and distribution networks are aligned for long-term success.

1. Internal Efficiency Opportunities

Many manufacturers first focus on internal efficiency before launching external subscription offerings. This approach allows them to test digital solutions within their operations, gaining valuable insights and building a strong business case. For example, Caterpillar and Scania equipped over 500,000 pieces of equipment with sensors, leveraging data internally before offering connected products and services to their dealers. Similarly, Schindler installed predictive maintenance solutions in 100,000 elevators to optimize service operations before packaging these innovations for installers and repair companies. This strategy not only fosters internal efficiencies but also ensures a market-ready digital solution.

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2. Digital and Connected Services

Another practical starting point for subscription models is offering digital and connected services that support the business. These may include repackaging existing services—such as maintenance, warranties, condition-based monitoring, remote customer support, training, and engineering—into monthly or annual subscriptions. Such services can also form part of a tiered “good-better-best” Product-as-a-Service offering. This phase helps internal teams develop deeper customer understanding and prepares the organization for more advanced stages of subscription maturity.

A compelling example is JohnDeere’s FarmSight solutions, which bundle precision farming tools, remote monitoring, and agronomic consulting services into subscription packages. With connected equipment outfitted with GPS and telematics, John Deere helps farmers optimize planting, fertilizing, and harvesting operations. The subscription offers various tiers, providing flexibility for different farm sizes and requirements, while giving John Deere valuable insights into machine usage and agricultural practices. This connected service model allows farmers to increase efficiency and yields, while John Deere gains a steady revenue stream and stronger customer relationships​​.

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3. Software-as-a-Service (SaaS)

Many manufacturers are already offering cloud-based software solutions through SaaS subscriptions. There are two primary types of SaaS providers. The first includes pure SaaS companies that develop software specifically for the cloud, while the second involves traditional companies transitioning on-premises software licenses to subscription-based SaaS models. Both approaches align with customers' growing preference for flexibility and regular updates without the burden of managing infrastructure. Traditionally, manufacturers have given away software for free as part of the equipment bundles without truly understanding the value they bring to their customers. Transitioning or innovating in SaaS is the best way to get started with As-a-Service transformations. Manufacturers can get their feet wet and start understanding key As-a-Service principles.

A notable example is Siemens, which offers its MindSphere platform as a subscription-based SaaS product. MindSphere is an industrial IoT operating system that connects manufacturing equipment to the cloud, enabling real-time data collection, analytics, and predictive maintenance. By providing access to valuable insights through subscription packages, Siemens empowers manufacturers to optimize production processes, reduce downtime, and improve asset performance. This transition to SaaS not only diversifies Siemens’ revenue streams but also strengthens customer relationships by offering ongoing value beyond the initial equipment sale​​.

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4. Connected Products and Services

Connected offerings, including PaaS (Platform-as-a-Service), EaaS (Equipment-as-a-Service), HaaS (Hardware-as-a-Service), and DaaS (Device-as-a-Service), represent the core of manufacturing’s digital transformation. Over the past decade, manufacturers have made significant investments in IoT and Industrial IoT to enable predictive maintenance and asset optimization. These investments have given rise to innovative XaaS business models, where customers subscribe to products, equipment, or even entire plants. For examples, the HVAC is a successful category where Cooling-as-a-Service offers outstanding benefits to end-users. These benefits include reduced capital expenditure (CapEx), extended product lifecycles, all-inclusive subscriptions, and outcome guarantees. Other examples include Lighting-as-a-Service and Inspection-as-a-Service in manufacturing plants.

A powerful example is Kaeser Kompressoren’s "Compressed-Air-as-a-Service" offering. Instead of selling air compressors, Kaeser provides compressed air based on customer demand, with billing tied to actual usage (m³). Through IoT-enabled systems, Kaeser monitors and optimizes compressor performance in real time, ensuring efficient operation and minimized downtime. This model eliminates the need for customers to invest in or maintain the equipment, as Kaeser retains ownership and responsibility for servicing. By focusing on outcomes—delivering reliable, energy-efficient compressed air—Kaeser enhances customer satisfaction while creating long-term, recurring revenue streams​​.

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5. APIs and Data

Cloud APIs have revolutionized the digital economy by facilitating seamless communication between SaaS and other cloud-based applications. Similarly, Industrial IoT APIs enable manufacturers to connect industrial equipment to the cloud, unlocking remote monitoring, maintenance, and control capabilities. By deploying low-cost IoT gateways with Industrial IoT APIs, companies can lower equipment downtime, reduce maintenance costs, and accelerate innovation. This connectivity paves the way for new EaaS business models and delivers the productivity and sustainability benefits promised byIndustry 4.0.

A great example of this is TRUMPF’s Pay-per-Part model for metal sheet fabrication. With their advanced remote-control systems, TRUMPF can monitor and manage machine operations in real-time. During night shifts, for instance, their system can remotely reboot machines, enabling them to resume tasks even without a technician on-site. This not only minimizes downtime but also maximizes machine utilization, showcasing how APIs and data-driven solutions can significantly enhance operational efficiency and customer satisfaction​.

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6. Platforms and Marketplaces

The most advanced subscription opportunities lie in the creation of digital platforms and marketplaces. Inspired by the success of e-commerce and platform-based unicorns in the B2C sector, industrial companies can develop vertical-specific platforms to connect entire ecosystems. These platforms enable buyers and sellers to transact and share knowledge, fostering a self-sustaining ecosystem. Platform pricing can vary widely, and marketplaces are designed to scale efficiently while delivering value to all participants. However, this model represents the pinnacle of digital maturity and requires significant investment and strategic alignment.

An excellent example is GE’s Predix platform, a cloud-based industrial IoT platform specifically designed for the manufacturing and energy sectors. Predix connects equipment, data, and users across entire supply chains, enabling real-time data analysis and predictive insights. Manufacturers and operators use the platform to optimize asset performance, reduce downtime, and enhance operational efficiency. Moreover, GE has opened the platform to third-party developers, creating a marketplace where partners can build and sell applications tailored to specific industrial needs. This approach not only drives innovation but also fosters a thriving ecosystem of users and developers, generating recurring revenue for GE while delivering immense value to participants​​.

A Phased Approach to XaaS Implementation

Most companies do not begin their subscription journey with complex models like platforms and marketplaces. Instead, they start with SaaS and connected services to build customer intimacy and operational expertise. Early-stage efforts also involve gaining buy-in from distribution partners through simple subscription offerings. Simultaneously, they develop PaaS and EaaS models to broaden their portfolio. Opening multiple fronts is common as manufacturers accelerate their transition to subscription-based models.

This step-by-step approach ensures that organizations learn from each phase, leveraging these insights to drive greater innovation and success in the competitive landscape of XaaS in manufacturing.

How P2S Management Consulting enables successful subscription transformation

Building on the phased approach to XaaS implementation, P2S Management Consulting partners with manufacturers to design, implement, and scale subscription-based models tailored to their business needs. With our proven Subscription Action Plan, we focus on delivering practical, results-driven solutions that ensure long-term success.

Strategic focus and market alignment

We help manufacturers identify the most viable entry points for subscription services—such as SaaS, connected products, or EaaS—and craft strategies that align with customer demands and market opportunities. By leveraging market insights, we ensure your offerings deliver both customer value and competitive differentiation.

Digital enablement and operational efficiency

From integrating IoT and predictive analytics to establishing real-time monitoring capabilities, we enable manufacturers to deliver consistent, high-quality service. These digital tools not only optimize operations but also foster data-driven decision-making and customer satisfaction.

Revenue and organizational transformation

Our experts guide you in developing pricing models that balance flexibility with profitability. We also prepare your sales and service teams for the shift to relationship-based selling, ensuring alignment across all organizational functions to maximize recurring revenue streams.

At P2S ManagementConsulting, we don’t just provide advice; we walk with you through every step of your transformation journey. Let us help you unlock the full potential of XaaS for your business.

Contact us today to explore how we can accelerate your path to subscription success.

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