To provide case studies of US companies that sell equipment in an as-a-service model (preferably in the healthcare industry but can be outside of it), including information about the payment models, services provided, and ownership of the equipment.
- One of the older examples of the business model of selling equipment as a service (EaaS) is Rolls-Royce when it “introduced its Power by the Hour program, pricing their Viper aircraft engines based on flight hours, back in 1962.”
- An EaaS model can reduce the customers’ operating expenses and return more revenue to the vendor, according to Bain & Company.
- A service-model revenue can exceed capex (capital expenditures) model revenue “over a typical 10-year life of equipment.”
- The payment model in EaaS can be outcome-based or time and usage based.
- In outcome-based models, payments are “based on operational or financial achievements.”
- “Time-based models base payment on a set amount per unit for a fixed period of time," while "usage-based models tie payment to the intensity of machinery use.”
Hartford Steam Boiler
- Hartford Steam Boiler (HSB) offers its steam generation equipment/system to hospitals as a service, and calls the solution SaaS (Steam-as-a-Service).
- HSB replaces hospitals’ legacy steam systems with "state-of-the-art, next-gen IoT boiler technology, with no capital expenditures.
- When replacing hospital boilers, HSB “takes care of the design, build, operations, maintenance, and efficiency and efficacy guarantees” of the new steam generation system.
- The transition to an “as-a-service” model for the steam generation system moves capital expenditures to operational expenditures.
- HSB’s ‘SaaS’ includes operations, maintenance, and administration, which means the hospital does not need to hire its own technical personnel for the steam generators.
- The solution is IoT (Internet of Things) capable, and HSB experts monitor the system remotely.
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