In today's industry, the way machines and equipment are used is changing fundamentally. Equipment as a Service (EaaS) offers a flexible, usage-based approach, but it is still unclear how widely this model will actually be used in mechanical and plant engineering. Many companies are still in the evaluation phase. In this article, we highlight the advantages of EaaS and show how we, as a service provider, support plant manufacturers in preparing for and benefiting from these new challenges.
What is Equipment as a Service (EaaS)?
Equipment as a Service (EaaS) is a business model in which companies do not buy machinery , plants , or other technical equipment, but rent it for a monthly or usage-based fee . It is a transition from classic ownership to the pay-per-use approach . Customers only pay for the use of the equipment, without the high initial investment typically associated with purchasing. This model offers companies flexibility as they can scale the equipment as needed and do not have to take responsibility for maintenance or upgrades. The provider retains ownership of the equipment and provides maintenance, spare parts, and sometimes even upgrades, allowing the customer to focus more on their core business.
The process of the EaaS model
In the EaaS model, the systems are usually installed at the customer's premises , as they obviously need them for their own production processes. It is important that the provider - usually the machine or plant manufacturer - remains the owner of the systems . The customer only pays for the use of the machines, while the provider is responsible for maintenance, repairs and upgrades.
In some cases, however, there are also models where the provider operates the machines in its own facilities and only makes the results or capacities of the machines available to the customer. This then falls under "Production as a Service" , where it is not the machine itself that is sold, but its output. In the classic EaaS model, however, the machines are located at the customer's premises to support their production processes.
CAPEX and OPEX – the financial aspects of EaaS
To fully understand the benefits of EaaS, we need to explain two key terms: CAPEX and OPEX.
- CAPEX (Capital Expenditure) : CAPEX is capital expenditure. These are one-time, large costs for purchasing machinery, equipment or other long-term investments. These costs burden a company's balance sheet because they are incurred at the beginning of an investment.
- OPEX (Operating Expenditure) : OPEX refers to ongoing operating expenses such as rent, maintenance or energy consumption. These costs are incurred regularly and burden a company's profit and loss account because they are directly related to operations.
EaaS shifts the financial burden from CAPEX to OPEX . Companies no longer have to invest large sums in the purchase of new machines, but instead pay regular, predictable fees that are billed as operating expenses. This relieves the balance sheet and makes financial planning more flexible.
What does EaaS mean for WIMTECH?
Since many of our customers are active in plant engineering, the EaaS model also affects our work processes. Our expertise helps plant manufacturers to implement their EaaS models smoothly . For example, we supply customized control cabinet solutions , take care of the electrical and mechanical assembly of the systems or carry out contract manufacturing of components so that plant manufacturers can provide their customers with fully functioning systems - without the effort of internal production. This shortens delivery times and increases the flexibility of the plant manufacturer.
By offering flexible services in assembly and manufacturing , we adapt to the dynamic needs of plant manufacturers within the framework of EaaS . While the focus is on usage-based contracts and minimizing investments, we enable our customers to work more efficiently and cost-effectively. They can concentrate on their EaaS business while we provide the necessary infrastructure.
Conclusion
EaaS offers customers numerous advantages , such as flexible use and lower capital commitment , but presents a challenge for plant manufacturers . This model shifts market power further towards the buyer , which may result in lower margins and long-term risks for plant manufacturers . It remains to be seen whether EaaS will really prevail in mechanical and plant engineering - and it remains to be seen whether all plant manufacturers will be able to implement this model successfully. Although we do not offer machines as a service provider, but are active in the areas of mechanical and electrical assembly , control cabinet construction and module production , we support our customers - the plant manufacturers - in successfully implementing their EaaS models. In this way, we create added value by optimizing their processes and paving the way for the future of plant engineering .
„“EaaS presents our customers, the plant manufacturers, with new challenges – we develop tailor-made solutions to optimally support them in this change.””
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