Product as a Service

ron palinkas global technical services managerMost of you who know me professionally will think the title is a mistake, I am a strong advocate of technical services and the role it plays in large and especially manufacturing organizations.  What I frequently preach is “Service as a Product.”  Today, I wanted to talk about Product as a Service (PaaS.)  Long before Saas and PSO systems came into being there was the first adopted PaaS — CPC programs or “cost per copy.”  In this sort of revenue model, the supplier produces all equipment up-front –copiers, paper, supplies of toner, even specialized machines for different department machines, all with one goal–billing a charge each time a meter clicks.  This has some benefits for the customer, there are no upfront charges, and they are paying to click the meter, so anything that interferes with that–toner, paper, machine fault, all interferes with that–they simply contact the supplier and ask for a new one.  Seems very little risk to customer although they are being charged a premium for the service.  The supplier benefits in that he has full control of the supply ecosystem– he picks the model copiers/printers, the toner, the paper, the number of machine–he just has to be sure that he can provide everything needed for the customer to produce “clicks.”

ron palinkas global technical services managerBut what I am referring to is a strategy of PaaS outside of this established realm.  A former employer Martin Engineering had a program called “Clean Belt.”  In other words the customer paid for a clean belt, not all of the equipment and adjustments that went into to it.  Just a guaranteed clean belt, week after week.  Why worry about the details when the only thing you are concerned about is results—keeping the belt clean.  Beyond programs such a clean belt and CPC, some companies have moved into the problem-solving mode of PaaS.  For example an electric pump company recently changed their tag line to “We move water.”  It is an interesting development in the product space.  I look forward to hearing of more and more innovative models.


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