• Asset-as-a-Service

April 2021

Asset-as-a-Service: The Transformation from Capex to Opex – a further step towards Industry 4.0

The burden from the Corona crisis and the opportunities of new data-based business models present companies with tremendous challenges. They have to secure their technological competitiveness and further develop their business models, which requires high expenditures in research and development. This is especially important at a time when companies are taking pressure off their balance sheet rather than putting it on. In Europe in particular, many industrial companies face the problem of important investments absorbing a lot of already scarce capital, due to their presence in significantly less developed capital market compared to the US.

Usage-based financing models offer a solution to these challenges, as buyers no longer purchase an asset themselves, but acquire it from the equipment provider in a “pay-per-use“ model. However, since traditional financing models do not offer a conclusive solution for this, there is a need to develop usage-based financing concepts into the so-called Asset-as-a-Service (AaaS) models that will have the ability to address these gaps.

Asset-as-a-Service model has the potential to become a game changer of the 2020s. In this model, neither the balance sheet of the equipment provider, nor that of the asset user, necessarily represents a limiting factor. As a result, this leads to more flexibility on both sides.

However, AaaS is more than a new financing and payment model for companies. This model enables the development and anchoring of new data-driven business models. The model encourages companies to undertake the necessary investments and contribute to the digital and sustainable transformation of the economy.

German medium-sized companies should find a way to expand their technological and engineering innovative power and develop them further via data-driven business models. The AaaS model can become a key tool in this endeavor.

To download the German version of the white paper, please click here.