Last edited 27 Dec 2021

Products as a Service PaaS

Products as a Service (or PaaS) refers to products or concepts that are provided to customers along with accompanying services. In the technology sector, PaaS may also refer to Platform as a Service. Some customers are attracted to the idea of a PaaS agreement, since it allows them to acquire a product without making a large financial investment or commitment upfront.

Unlike renting or leasing a product, PaaS includes maintenance and replacement services as well as supply of the product. This tends to result in long term relationships between the customer and the provider.

Contracts are typically agreed on a subscription basis, which means payments to the provider are dependent on the continuing delivery of a satisfactory level of service. This can also mean the customer can modify payment options under certain circumstances.

In general, PaaS creates a more complex relationship than a straightforward purchase because the customer doesn’t own the product - the provider does. While the customer is dependent on the provider to deliver what has been promised, the provider is responsible for offering a product that meets the evolving needs of the client.

Due to the nature of the commitment, PaaS is typically associated with the development of products that have longer life cycles, reconditioning options and waste minimisation possibilities. This is in contrast to ‘disposable’ commodities that may break or become obsolete in a relatively short period of time.

Product longevity brings PaaS in line with circular economy principles where customers expect providers to care for the product and keep it operating at its highest level of efficiency for the duration of the relationship. In instances where customers no longer need the product, the provider takes it back, refurbishes it or replaces it with something equal or better for the next customer. When the product reaches the end of its life, some of the parts or materials can ideally be reused in the fabrication of another product.

The PaaS model has started to gain acceptance in the technology sector due to the increasing use of cloud computing, sensor devices, Internet of Things connectivity and other innovations that rely on wireless services that are reliable, affordable and widely available. This type of intelligent interoperability allows manufacturers to monitor the efficiency of their products while tracking customer usage, environmental conditions and degradation of equipment. In some instances, technology related PaaS can help prevent total failure of the equipment through proactive maintenance.

Product and service providers associated with construction and building operations are beginning to explore the PaaS approach in areas such as:

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