The trend of Everything as a Service, otherwise known as ‘XaaS’ or ‘Servitization’, is the shift away from buying and selling products towards the vending of services to achieve an outcome. In this economic model, instead of committing to a one-off purchase of a product, the customer would consistently pay on a per-unit basis, like the amount of time utilized, the number of products produced, or the number of tasks fulfilled, for results that meets their needs.
XaaS business models bring a new way of doing business to B2B relationships. For instance in the medical field, we here at DHL see change in how hospitals acquire medical capabilities. While in the past CT scanning equipment had to be purchased, now many hospitals buy the service of that equipment and only pay per CT scan. Altering the patterns of consumer behavior and the way customers engage with products, individuals and companies alike can opt to pay for equipment usage for a specified period of time or output, and not pay when equipment sits idle or broken. For example, rather than buying air-conditioning (AC) units, XaaS allows the user to pay for the number of cooled hours. As such, companies with XaaS business models must consider the life cycle of their product offerings, as well as any required maintenance and logistics services.
Technology providers now offer robotics, drones, warehouse management systems (WMSs), and more to the logistics industry as a service. This enables logistics professionals to redirect their focus from acquiring hardware and software to meeting demand and reaching strategic customer engagement goals.
While the foreseen impact is not very strong on logistics and the supply chain, this trend will greatly impact end users. Companies can keep customer experience at the core of their business by choosing everything as a service, building resilience to external disruption and its potential damage to their business.
Shifting existing product-based traditional business models to everything-as-a-service models is already well underway, however full transition will require further developments foreseen in the next 6 years. Only then will this become a new norm for business operations. Still being in early stages of wider adoption, this business model requires specialized IT skillsets that are still scarce, as well as strong IT infrastructures for billing processes to flow seamlessly.
