Equipment as a service:

Answering
OEM questions
Original equipment manufacturers (OEMs) need new ways to grow revenue and differentiate themselves as the
state of the industry evolves with new technologies. As consumer demands and expectations grow, manufacturers
urgently need to embrace digitalization and the industrial Internet of Things (IoT) to better compete and meet
customer needs.

While one of the best ways to increase customer satisfaction and loyalty is to offer valuable services, many OEMs
struggle with how to do this cost effectively: How can they continue engaging with customers long after the sale
has completed? That’s where equipment as a service (EaaS) comes in: a model that enables the relationship
between OEMs and their customers to become a long-term collaboration that benefits each party.

But what is EaaS really, and how can you get started with it? Here are a few commonly asked questions
about EaaS and how Siemens can help OEMs and their customers leverage it.

  2
How does EaaS work?
Equipment as a service enables new business models that help OEMs move from one-time sales to lifetime sales
of machines – from one-time revenue to recurring revenue. OEMs can sell machine outputs rather than the
machine itself. Most often, customers will lease a machine and then only pay for what they use; OEMs maintain
ownership and are responsible for maintenance and performance.

Payments can be made either directly to the OEM itself, or to a third-party owner, such as a financing
institution. These payments may be monthly based on how much customers use or based on the outcomes the
machines help customers achieve.

Why should OEMs and their

customers be interested in EaaS?
Both OEMs and their customers need another option for how they buy and use industrial machines, and
EaaS provides this option.

For OEMs, EaaS is a necessary strategy. Extending
the relationship beyond the initial sale gives OEMs
insights into how customers use the machines, which
can support add-on sales, cross-selling, and new
feature and product development. It also provides a
steady stream of recurring revenue.
For OEM customers, EaaS offers flexibility.
Customers can get immediate access to the machines
and the technology without needing to make a
massive financial commitment, hire additional people
or account for training.

How do OEMs offer EaaS?

OEMs must become a digitalized enterprise and embrace the industrial IoT. Every machine sold is outfitted with
sensors. The key now is to make sure the machines have the right type of sensors, and then connect those
sensors to an industrial IoT system that can read and analyze the data they collect.

Industrial IoT in the cloud allows for near real-time data collection and analysis so OEMs can remotely
monitor machine status, health and productivity in the field, and act appropriately to optimize settings. Contin-
uous transparency into machine health and being able to take proactive action will also nearly
eliminate unexpected downtime. This continuous monitoring can also be used to monitor the output or
key performance indicators to be monetized.

  3
What kind of benefits do OEMs
get with EaaS?
• I ncreased competitiveness and relevance for
customers. With access to real-time machine
performance data, OEMs can easily adjust
performance to what customers need.
•M
 ore predictable revenue streams. With EaaS,
OEMs have transparency into how their machines
are used in the field and can move toward predictive
maintenance that keeps machines running as long
as possible. If the machines run, OEMs get paid.
What kind of benefits do OEM
customers get with EaaS?
• Capital expenses turned into operational
expenses. By outright owning a machine,
customers spend much of their financial resources
in purchasing and maintaining those machines.
With EaaS, that capital can be used elsewhere, such
as R&D and marketing.
• Reduced overhead. Because OEMs take care of the
machine, customers are no longer tied to the over-
head that’s required to keep machines running for
20 or 30 years.
• Higher value generation. OEMs can begin offering
additional packages that generate more revenue.
A lower barrier to entry encourages new customers
to sign on with OEMs. And, OEMs can use near
real-time data about how machines run in the field
to create new, lucrative service contracts.
• New partnerships. With EaaS, OEMs can work with
partners to invoice, bill and collect payments or
insure the machines. Those responsibilities don’t
have to fall on them or their balance sheets.
• Increased flexibility. When you have more options
to choose how to pay for a machine, the flexibility
doesn’t end with finances. Customers also have a
wider range of possibilities in the technology they
choose to leverage and the levels of productivity
they’d like to see.
• Higher uptimes. Because customers pay for
machine usage or outcomes, OEMs don’t get paid
if the machines don’t work. OEMs have a higher
incentive to keep machines running in the field –
providing more uptime to customers.
  4
Does my company need to be
in a specific industry to take
advantage of EaaS?
No. This business model is on the rise in the machinery and the food and beverage industries, but there’s ample
opportunity for OEMs and their customers in other industries to experience the benefits of EaaS.

Simply put, if you manufacture or use industrial machines, you can take advantage of EaaS.

How can Siemens help OEMs

transition to EaaS?
Siemens has a unique package of resources to support the digital transformation OEMs and their customers
require for EaaS to fulfill multiple needs, from digitalization through machine financing.

These resources include:

•M
 indSphere®, Siemens’ industrial IoT as a service solution, which remotely connects, collects and analyzes
data from machines, assets, products and systems.

• Hardware connectivity to help OEMs send data from machines to the cloud.

• Industrial edge boxes to help OEMs save and analyze machine data in real time, locally.

•A
 financial structure to support OEMs and their customers in accessing new technologies at
a lower price point.

•C
 onsulting experts with ample experience to ensure the technology is quickly up and running.

  5
Taking advantage of everything equipment as a service can offer brings major
benefits to both OEMs and their customers. With more efficient machines and
streamlined access to new technology, it’s easier than ever to maintain a high
level of productivity, advance your digital transformation, and create new
business models and revenue streams.

To see how EaaS can work in your organization, try MindSphere now with a
free trial account.

Siemens Digital Industries Software

siemens.com/software

Americas: 1 800 498 5351

EMEA: 00 800 70002222
Asia-Pacific: 001 800 03061910
For additional numbers, click here.

© 2022 Siemens. A list of relevant Siemens trademarks can be

found here. Other trademarks belong to their respective owners.