Equipment as a service and the role of technology: the transition towards usage-based business models

Technological advances open opportunities for new ways of profit generation or entirely new business models (BMs). 'Equipment as a service' (EaaS) is perhaps one of the most drastic examples of technology-enabled BM innovation (BMI) in the field today. To gather knowledge on this phenomenon, we choose an exploratory, qualitative research design and collect data through 26 semi-structured interviews with experts belonging to four relevant stakeholder groups. Drawing on BMI theory, we clarify: why firms move towards usage-based BMs, what the main usage-based BM archetypes are, and how shifting to these archetypes innovates the BM. We discuss technology as a key driver of usage-based BMI. Our analysis further identifies four usage-based BM archetypes: Leasing Plus, Flexible Contracting, Renting/Sharing, and Performance Contracting. While this study focuses mainly on BMI in established firms, the results are also relevant to younger firms and start-ups that are yet to determine their BM.