Relayr Study: Decision-Makers at German industrial companies opting for Equipment-as-a-Service as a future model

Link to this heading # Relayr Study: Decision-Makers at German industrial companies opting for Equipment-as-a-Service as a future model

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• 86% of the machine and equipment manufacturers surveyed have already actively considered EaaS.
• Once decision-makers have considered implementing EaaS, 4 out of 5 (80%) go on to develop their own models.
• 54% of all machine manufacturing companies surveyed are currently developing their own services and are planning to launch them within the next twelve months. 14% have already introduced their own EaaS models to the market.
• Demand is also rising: One quarter of machinery and equipment users are planning to switch to EaaS models, most of them within the next 12 months

Berlin, May 31, 2022: With the ongoing servitization of the machine and equipment manufacturing sector, decision-makers in the German manufacturing industry are increasingly turning to Equipment-as-a-Service (EaaS) as a viable sales and business model for the future. This was revealed in a study published today by IIoT company relayr, part of the Munich Re Group, in cooperation with the market research institute forsa. An impressive majority (80%) of machine manufacturing companies already considering EaaS are opting to implement the model. More than half (61%) of machine manufacturers currently developing an EaaS model plan to roll it out within the next 12 months. In doing so, three-quarters of all respondents rely on the support of external partners.

The study “Equipment-as-a-Service in the Manufacturing Industry,” conducted in April 2022, examines the perspective of decision-makers from companies in various sectors of the German manufacturing industry. Both the companies that manufacture machines and systems (supplier side) and the users of the machines were surveyed in order to gain insights into the current status of the application of EaaS models, the drivers and potential for the industry and the companies themselves, and the current degree of implementation. In addition, the survey looked at the companies’ assessments of their own readiness and the current requirements for deploying EaaS within the company, the challenges on the path to implementation, and the needs of decision-makers as they seek to overcome these challenges.

Most German machine manufacturers plan to roll out EaaS models within the next 12 months

The results clearly show that EaaS will play a crucial role in the industry in the near future. At the time of the survey, only 14% of the machine manufacturers surveyed had an EaaS model on the market, but 54% are already actively planning and developing such a model. Of those that already have EaaS models on the market, 94% offer services to accompany their machines. Another 50% are further ahead, already offering selected assets or equipment via an EaaS financing model such as pay-per-part or per-use. 11% of current providers have gone as far as to fully embrace the servitization trend and have already completely transitioned their entire business model to EaaS financing models. Two-thirds of the decision-makers who are currently planning to implement EaaS models say they want to offer accompanying services for their machines (64%) as well as for selected assets via an EaaS model (64%).

Increasing demand expected from potential EaaS users

Prospective users of EaaS models represent a great deal of potential for the coming months. Although 35% of this group had not yet considered EaaS and just 11% are currently implementing EaaS services, one quarter of those surveyed are planning to implement EaaS in the near future. When the group was asked what is currently needed most to overcome barriers to implementation, it is evident from the responses that the companies have some catching up to do: 43% would like to acquire more overall expertise on EaaS models, how they work, and which providers are on the market. Another 47% even need more knowledge about the predictive maintenance and remote service capabilities included in EaaS.

The importance of EaaS for the industry is based on a set of benefits and improvements

When asked about the three key drivers of EaaS models within their industry, decision-makers paint a very balanced picture in terms of the importance of the various benefits they associate with the use of EaaS for the industry in general and their company specifically: For 30% of respondents, the financial planning security associated with EaaS scored highest most frequently in the individual rankings among the top three. For machine manufacturers’ customers, EaaS models eliminate the need for comprehensive investments and thus the long-term capital commitment. In addition, maximizing machine uptime, using equipment as efficiently as possible, deepening customer relationships, switching from CapEx to OpEx, and the competitive advantages gained as a result were each cited by more than 20% of respondents among the three biggest incentives. EaaS helps innovative products and technologies find their way into the industry more quickly, an advantage that decision-makers rated as nearly as important (cited among the top three factors at 19%).

Improvement of machinery and equipment: the most relevant benefits for machine manufacturers

The option of being able to adapt and thereby improve the functions, capacities, and operations of their own machinery based on generated usage data appears to be the biggest incentive for decision-makers within the context of their own company. This qualitative advantage, which not only offers machine manufacturers clear competitive advantages but also benefits customers in the long term, was ranked by 39% of machine manufacturers as one of the three main motivators. Even those advantages that were mentioned less frequently were ranked in the top three by more than a quarter of respondents: the potential to implement condition monitoring and predictive maintenance, thereby enabling uptime guarantees, and the prospect of increasing company revenues by taking over after-market services (26% each).

State of the art technology: the most relevant advantage for users of machinery and equipment

For prospective users of EaaS models, there is also a series of relevant benefits. EaaS helps keep equipment up to date with the latest technology, which 24% cited as one of the biggest incentives. The option of predictive maintenance and condition monitoring, plus the fact that the operational risk remains largely with the machine supplier, are nearly as important for this group (23% each). They are also motivated by uptime guarantees and the prospect of avoiding major capital investments through the use of EaaS (21% each).

A glimpse into the future: Companies need partners in order to implement their plans as scheduled

Among the potential providers of EaaS models, nearly half (45%) of those surveyed claim that their machines are already digitized to a reasonable degree. 61% of them are already planning implementation in the next 12 months. On the user side, as many as 63% are considering switching to an EaaS model in the next 12 months. However, both sides express a need for support in this transition on several levels. While potential providers appear to be the least concerned about financing (29%), 36% would like insurance against business and operational risk, 41% need help developing condition monitoring and predictive maintenance systems, 42% need help generating real-time machine usage data, and one in two companies would like help assessing demand.

There is also an increasing demand for EaaS among machinery users. Many of them require more expertise, and 37% also need support in adapting their IT infrastructure and data architecture. Knowledge about requirements, functionality, and implementation of EaaS models will become increasingly valuable in the near future.

The complete results (in German) can be found in the detailed study report at the following link: https://relayr.io/de/forsa-eaas-2022/

In addition to the key areas mentioned in the study, the survey also includes information from companies already using EaaS about how long they have been implementing it, the financial resources they are using, and their work with cooperation partners on their projects.

Jessica Poliner, CEO relayr: “I believe the results are very encouraging on a number of fronts. The Equipment-as-a-Service model represents a true paradigm shift. EaaS solutions build customer relationships and enable outcome-based contracts – driving new revenue streams and long-term revenue potential. As a partner to the industry, we’re excited to play our part in realizing this potential going forward. With our unique complete solution, we support industrial companies in developing and implementing EaaS models. We do so by combining tailored IIoT technology solutions with powerful financial and insurance products and services.”

About the study – methodology

The empirical study “Equipment-as-a-Service in the Manufacturing Industry” was conducted by relayr and the market research institute forsa with the overall objective of determining the current status of the implementation and application of future-oriented EaaS models within the German manufacturing industry. The representative sample includes 200 companies with a workforce of more than 100 employees who were surveyed during the period from April 12 to 22, 2022. The companies operate in various sectors of the manufacturing industry. Individuals in positions with decision-making authority were specifically targeted for this partially standardized online survey.

About relayr

Relayr is an innovative powerhouse for the IIoT (Industrial Internet of Things). The company provides its customers with individualized, interoperable IIoT technology solutions and combines them with powerful financial and insurance products and services. It offers a complete solution for industrial companies that is unique in the market, simplifying the path to digital transformation while minimizing its risks. Relayr’s expertise supports manufacturers, operators, and service providers from all industries at any phase in their transition from CAPEX to OPEX-based business models and in developing and implementing Equipment-as-a-Service models.

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