Machine as a service – The future business model of the OEM

Willem Sundblad over at Forbes writes about the change in OEM sales models from a one time sale, to a ‘machine as a service’ subscription model. Utilizing IIoT technology (The Industrial Internet of Things incorporates machine learning and big data technologies to utilize the sensor data, machine-to-machine communication and automation technologies that have existed in industrial settings for years.) to allow OEM’s to continuously monitor the up-time of their equipment in the field and use that as the revenue driver, rather than the sale of the machine hardware itself. He adds that this new model will give predictability to both the revenue stream for the provider, but also to their customers who will benefit from increased equipment up-time due to better maintenance and service scheduling.

The benefits to performing an ongoing service are staggering. OEMs form tighter relationships with their buyers, customer satisfaction and loyalty increases, and the OEM has an ongoing stream of income, which is especially critical during down business cycles.

Machines as a service
Photo credit: Gorodenkoff/

The use of predictive analytics by machine tool builders to minimize the amount of stock that they carry and to be able to plan maintenance stops in advance, thus avoiding stopping a customers production, can be something of a game changer. Added to that, the fresh input to their R&D processes will enable the OEM’s to refine future machine models to meet all their customers needs.


However great the future looks for machine tool OEM’s and their customers, there are a few things to overcome before we all start to reap the rewards of a ‘machine as a service’ model. Firstly there’s the number of legacy machines on the shop floor. Very few shops are full of machines purchased in the last year. To make this model successful, OEM’s need to find a way to upgrade their older machines and support them with a predictive maintenance plan, or allow third parties the interface to do so. And secondly there aren’t many shops with only one brand of machine tool installed. To give the customer the most from his new IIoT equipped machine they should allow their customers or approved external companies access to the data source so that they can have remote visibility of their machine park analytics from one platform, instead of one platform per machine tool brand.

What are your experiences with IIoT? Have you any experience with ‘machine as a service’ models and what advantages and hinders did you find? Let us know in the comments below.

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