Design World

  • Home
  • Technologies
    • 3D CAD
    • Electronics • electrical
    • Fastening & Joining
    • Factory automation
    • Linear Motion
    • Motion Control
    • Test & Measurement
    • Sensors
    • Fluid power
  • Learn
    • Ebooks / Tech Tips
    • Engineering Week
    • Future of Design Engineering
    • MC² Motion Control Classrooms
    • Podcasts
    • Videos
    • Webinars
  • LEAP AWARDS
  • Leadership
    • 2022 Voting
    • 2021 Winners
  • Design Guide Library
  • Resources
    • 3D Cad Models
      • PARTsolutions
      • TraceParts
    • Digital Issues
      • Design World
      • EE World
    • Women in Engineering
  • Supplier Listings

What is Machine as a Service (MaaS) and what are its benefits?

By Danielle Collins | March 11, 2022

Share

Most of us are familiar with the software as a service (SaaS) business model, in which users pay a fee to access software over the internet, without requiring an application or download to a local machine. The software as a service model made complex software, such as CRM (customer relationship management) systems, more accessible to small business, thanks not only to a more manageable subscription-based pricing structure but also by removing the necessity for specialists to install, update, and manage the software in-house. In the manufacturing space, a similar concept, known as a machine as a service (MaaS) is taking hold.

The machine as a service business model (also referred to as Equipment as a Service, or EaaS) offers some of the same benefits to manufacturers, including low or no capital expenditure, with upgrades, service, and maintenance handled by the machine builder (OEM). And while the MaaS business model has been around since the 1960’s, when Rolls Royce began offering aircraft engines on a fixed cost-per-flying-hour basis, interest has grown in recent years, especially given the unprecedented labor shortages and supply chain issues that manufacturers have experienced during the COVID-19 pandemic.

SaaS vs MaaS
The growth of the MaaS model is being driven by digital technologies, including IIoT, edge computing, and digital twins.
Image credit: Oilman Magazine

One of the biggest challenges for OEMs looking to implement the machine as a service model is determining a cost structure that is beneficial — and manages risk — to both the user and the OEM. Although variations exist, most MaaS agreements are built around one of two basic models.

  1. The OEM sells the machine to the user at a cost much lower than that typical of an outright sale. Then, for each item produced by the machine, the OEM receives either a fixed payment or a percentage.
  2. An end user who owns a machine but doesn’t utilize the machine’s full capacity allows other manufacturers to use the machine on a subscription basis.

For small and medium-sized manufacturers — who may not have the capital to purchase equipment outright or the guaranteed, consistent demand to justify the expenditure — the machine as a service model can put expensive capital equipment within reach, making additional production capacity feasible while minimizing some of the risk of an outright purchase. And because the machine OEM is responsible for maintenance, service, and upgrades, manufacturers don’t need in-house expertise or resources for these tasks. Unlike a traditional rental contract, the MaaS model insulates the manufacturer from expensive payments on unused capacity if demand falls, shifting this risk to the OEM.

For the OEM, the machine as a service model shifts what would traditionally be a one-time machine sale into a recurring revenue stream over the machine’s lifetime. And because the OEM maintains the machine, this model strengthens the OEM’s ties to the user, giving the OEM a better platform from which to offer additional services and products.

For OEMs in particular, the success of the MaaS model relies on technologies such as IIoT connectivity, edge computing, and digital twins. These connected technologies allows OEMs to track and monitor machine usage (for accurate, transparent billing), and to do so in real-time. They also make it possible to collect detailed performance data, which can be used by the OEM to execute predictive or preventive maintenance and to determine when upgrades are appropriate. Performance and operational data can also be aggregated across multiple machines in the field to drive product upgrades and new product developments that are relevant to the market.

machine as a service case study
Although the MaaS business model shifts some market risk to OEMs, they also have an opportunity to gain long-term benefits in terms of sales and product development.
Image credit: FutureBridge

Of course, the machine as a service model isn’t a good fit for highly custom or specialized equipment. The best fit are machines that perform a single function or small group of functions — such as machining centers and palletizing equipment — and that can be easily integrated into an existing production facility and workflow. Robots — and cobots in particular — have proven to be ideal for this business model. In fact, alongside the MaaS model, a related business model, known as robot as a service (RaaS), is also gaining acceptance in the manufacturing space.

Feature image credit: Cisco

machine as a service


Filed Under: Motion Control Tips

 

Related Articles Read More >

Schneider Electric launches Universal Automation Discovery Packs to foster industrial innovation
Encoders from SIKO support Industrial Ethernet
Draw-wire encoders from SIKO measure position, speed and inclination
Incremental encoders configurable via NFC (near-field communication)

DESIGN GUIDE LIBRARY

“motion

Enews Sign Up

Motion Control Classroom

Design World Digital Edition

cover

Browse the most current issue of Design World and back issues in an easy to use high quality format. Clip, share and download with the leading design engineering magazine today.

EDABoard the Forum for Electronics

Top global problem solving EE forum covering Microcontrollers, DSP, Networking, Analog and Digital Design, RF, Power Electronics, PCB Routing and much more

EDABoard: Forum for electronics

Sponsored Content

  • Global supply needs drive increased manufacturing footprint development
  • How to Increase Rotational Capacity for a Retaining Ring
  • Cordis high resolution electronic proportional pressure controls
  • WAGO’s custom designed interface wiring system making industrial applications easier
  • 10 Reasons to Specify Valve Manifolds
  • Case study: How a 3D-printed tool saved thousands of hours and dollars

Design World Podcasts

May 17, 2022
Another view on additive and the aerospace industry
See More >
Engineering Exchange

The Engineering Exchange is a global educational networking community for engineers.

Connect, share, and learn today »

Design World
  • Advertising
  • About us
  • Contact
  • Manage your Design World Subscription
  • Subscribe
  • Design World Digital Network
  • Engineering White Papers
  • LEAP AWARDS

Copyright © 2022 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising | About Us

Search Design World

  • Home
  • Technologies
    • 3D CAD
    • Electronics • electrical
    • Fastening & Joining
    • Factory automation
    • Linear Motion
    • Motion Control
    • Test & Measurement
    • Sensors
    • Fluid power
  • Learn
    • Ebooks / Tech Tips
    • Engineering Week
    • Future of Design Engineering
    • MC² Motion Control Classrooms
    • Podcasts
    • Videos
    • Webinars
  • LEAP AWARDS
  • Leadership
    • 2022 Voting
    • 2021 Winners
  • Design Guide Library
  • Resources
    • 3D Cad Models
      • PARTsolutions
      • TraceParts
    • Digital Issues
      • Design World
      • EE World
    • Women in Engineering
  • Supplier Listings