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Product as a Service

Product as a Service’ refers to a business model where products are not purchased outright and owned by customers but are instead “rented” through subscription or pay-per-use agreements.

The adoption of ‘Product as a Service’ has been especially driven by developments in sensor tech, data analytics, IoT, and cloud computing.

Overview

A Unique Opportunity for Enterprises

‘Product as a service’ can be offered through various models, including rental, subscription, or pay-per-use. This business model offers many advantages and benefits, including an enhancement of the overall customer relationship by offering flexibility and financial freedom.

Furthermore, ‘Product as a service’ offerings extend product access to new customers, who may otherwise not be able to afford products outright. This increases returns overall by creating new and recurring revenue streams.

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Challenges

Challenges Addressed by Product as a Service

Acquiring, using, and maintaining complex products can be challenging for businesses, with high entry costslimited usageproduct obsolescence, and operational complexity being some of the key issues. Product as a Service addresses these challenges by providing a subscription-based model that offers access to products and services, ongoing support, and upgrades.

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High Product Entry Costs

Customers tend to avoid high upfront investments of expensive products due to the financial burden and potential risk associated with it.
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Limited Time of Usage

Certain products are only needed for a specific timeframe are not attractive for permanent product ownership.
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Product Obsolescence

Offering customers access to the latest products and upgrades helps combat product obsolescence and encourages continuous innovation.
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Operational complexity

Complex products require deep understanding or on-site knowledge to use and maintain them effectively, adding to the products overall cost.
Outcomes

The Business Outcomes of Product as a Service

Offering products as a service can create opportunities to tap into new audiences and revenue streams. Time and again, history has shown that when products require a high acquisition cost, complex upkeep from an on-site team, or simply when a customer needs access to cutting edge technology, product as a service offerings are an optimal method by which to overcome these challenges.

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Attract New Customers

Temporary product usage without ownership means a lower cost of entry, which widens the potential pool of customers.
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Increased Revenue

Recurring revenue streams with long-term commitments create a more predictable and consistent cash flow.
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Enhanced Customer Satisfaction

Customer satisfaction is improved due to increased flexibility. Customers can access the latest products and services without the commitment of ownership.
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Increased Sustainability

An increasingly sustainable consumption pattern is encouraged due to a more efficient use of resources.
Capabilities

The Spryker Solution

Learn how Spryker & our partners enable this use case and your success

Spryker Capabilities

  • Concrete and Abstract Products
  • Configurable Products
  • Price management
  • Promotional Discounts
  • Inventory Management
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Professional Services

  • Customer Journey Analysis
  • Operating Model Sparring
  • Process Design Workshop
  • Capability Mapping
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See Spryker in Action.

Make digital commerce your competitive advantage with a platform that optimally implements your unique business model.

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