Industry 4.0 continues to generate a lot of interest in the industrial sector, with a bright future

According to a study by MarketsandMarkets, the Industry 4.0 market is expected to reach $156.6 billion by 2024, with a compound annual growth rate (CAGR) of 16.9% between 2019 and 2024. This concept, aimed at digitizing and automating production processes in the manufacturing industry, uses advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), robotics, and augmented reality.

Thanks to these new technologies, equipment manufacturers have the opportunity to produce differently, develop smarter products and services, and improve manufacturers operational efficiency and productivity.

The digital transformation is disrupting the industrial market, changing the competitive landscape and the emergence of new business models. It also offers many opportunities, especially when implemented effectively and with the right partners.

Harness the power of Industry 4.0 to boost your revenues and margins

Everything should start with a strategic reflection on its business model

The business model of industrial equipment manufacturers can vary depending on their specific activity and market position, but there are some common elements that generally characterize their business model.

In 2022, 62% of equipment manufacturers use a “Cost Plus” model (according to a study by Copperberg), but is this the right strategy to stand out from the competition?

The "Cost plus" approach has the advantage of being relatively easy for companies to calculate and understand because it is based on real costs. However, it does not take into account market demand or competition, which can make prices uncompetitive or insufficiently profitable.


Defining the right business model means determining how to generate recurring and sustainable revenues. What is the proposed product or service? What is the added value of this product or service compared to the competition?


The business model's objective is to identify how to create value through the integration of new revenue models, the implementation of an adapted organization, and the establishment of a range of products and services that meet current and future consumer expectations.

Switch from reactive to proactive mode thanks to data > business model success

Many equipment manufacturers still rely on a reactive model, which involves waiting for failures to occur before intervening, which can lead to costly downtimes and production disruptions. In the event of a breakdown, the operator must contact the after-sales service, not always efficient, or buy back the necessary parts, even the machine, etc.

In this model, the service aspect is not at all considered as a source of value for manufacturers.

One of the solutions to this is to leverage data as an enterprise asset, moving from reactive to proactive.

  • Data collection: relevant and reliable from various sources
  • Data analysis: to derive useful information, identify trends and patterns
  • Using information: to make informed decisions
  • Process automation: to be truly proactive


Data from production machines is the key to anticipating future events, fostering the creation of proactive services to best meet end-user requirements.

This involves reversing the service approach, to change from an “expertise to the machine” mode to an “expert machine to the technician” mode. Combining these data-driven services with an appropriate business model can improve customer satisfaction while ensuring a competitive and efficient future.

The 4 business models associated with InUse solutions

Warranty extension

The equipment manufacturer offers its end customers a warranty extension, including different levels, based on a multi-year subscription.
Several packages are offered (Basic, standard, premium, etc.), indexed to the value of the machine and offering a combination of additional products and services, such as preventive maintenance programs or after-sales service offers.
The objective is to provide the best support by controlling its costs. For example, thanks to the proactive approach, it is possible to do well the first time and even to allow the end user to solve the problem on his own.
The link between the supplier and the user becomes simpler and is established on a common reference. In fact, all decisions are systematically justified and shared. The value created on the life of the equipment is then shared between the end customer's profits and the manufacturer's income.
The data-driven approach is mandatory to maximize contract margin, with particular emphasis on equipment misuse.

Some benefits for end users:

  • The user experience is augmented by the manufacturer’s expertise, which continuously helps to maintain the operational conditions of the system
  • Peace of mind through the continuity of a well-known, reliable, and professional support model
  • A personalized digital coach throughout the life of the machine

Options applicable with a specific scope:

  • Continuous digital improvement
  • Predictive maintenance
  • Optimization of energy consumption
  • Refurbished spare parts
  • Modernization of the machine…

Development of specific services to provide a precise response to a need

The development of specific services with high added value can be an effective way for a company to differentiate itself from its competitors by providing unique solutions to its customers.
This involves providing the user with crash insurance or a guide to optimizing business processes.
These specific services are often complementary to a warranty extension model. They bring unique digital expertise, achievable by the manufacturer who controls the industrial system and its specified flight range.
This service model is based on future value created. In the case of predicting high-impact outages in the production chain, value is equated to the avoidance of a sudden cost.

Performance-based commitment agreement

A performance-based engagement contract is a contract that sets objectives and results for both the equipment manufacturer and the end user. The value of this contract is divided into a fixed part and a variable part indexed to this performance. Contract variability is either upward, bonus, or, downward, penalties.
The proactive model makes it possible to anticipate deviations from the contract to the objectives and to correct the trajectories. Both stakeholders are motivated to achieve these objectives.

Key elements of such a contract include:

  • Clear objectives that can be quantifiable and unambiguously measurable so that results can be easily evaluated.
  • The precise performance indicators that characterize the objectives. These indicators will be analyzed at a specific instant, but also over a long time period in order to identify drifts.
  • The compensation plan is to be applied. The equipment manufacturer will be awarded bonuses or penalties depending on the performance evaluated


This type of contract allows you to strengthen your strategic position and engage a high level of availability based on proven performance.

  • Measure performance in an evidence-based manner, based on defined KPIs
  • Alert and anticipate deviations, to act accordingly
  • Diagnose problems with your expertise
  • Note the impact of your interventions


This business model is based on real data. Mastering data and its analysis is a strategic element.


Pay-as-you-go is a pricing model in which the customer pays only for the goods or services they actually use, rather than for a predefined package or period. This may include pricing models such as hourly, kilometer, etc.

The aim is for the manufacturer to offer its equipment in the form of an optimized operational cost since the service provider bears this cost directly.

This pricing model offers many benefits, including:

  • Cost savings: pay-as-you-go can reduce costs for customers who only pay for what they actually use
  • Flexibility: customers can tailor their use to their needs, and better appreciate peak loads
  • Transparency: Pay-as-you-go can provide full transparency on the real costs of the goods or services used. Customers can easily understand what they are paying and why.
  • Innovation: Pay-per-use encourages manufacturers to innovate and provide better quality services to meet the needs of their customers.


The subscription offer "Pay for Use" ensures security for the end user who will pay for access rather than possession. They no longer have to worry about installation, maintenance, after-sales service, etc. The equipment manufacturer manages everything for them.

For this business model to work, the manufacturer will:

  • Measure actual equipment usage
  • Check usage errors that would impact its margin
  • Organize a proactive support network to respond quickly


In this model, it is not the product that has value, but rather its use.

Implementing a proactive service solution means valuing your skills, business knowledge, and agility. Data makes it possible to fulfill this promise by placing assets at the heart of the system and distributing knowledge to the players in the value chain. By their precision and reliability, they are also the means to make viable the economic models that are the foundation of the transformation process.

Aiming for more than 30% improvement in the performance of its field teams and significantly increasing the revenue, and predictability, of the service department, are ambitious but attainable goals. In addition, customer satisfaction, motivation, recognition of the service teams, and a better knowledge of customer usage are the obvious indirect benefits.

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