Methodology for the risk and reward evaluation of industrial subscription models

A promising type of innovative business models for the machinery and plant engineering industry are subscription models. In an industrial context, subscription models are enabled by novel opportunities due to ongoing digitization and Industrie 4.0. Customers receive a regular delivery of performance in terms of a product-service system in return for a continuous payment of a subscription fee. Prerequisite for an efficient subscription model is the interaction of several industrial players with in-depth knowledge in a network, in which every player derives its benefit from a low-risk long-term business. Before implementing this new business model, companies need to assess the potential risks and rewards of the subscription model for their particular application. This paper presents a methodology for the evaluation of risks, rewards and chances for stakeholders in a subscription ecosystem. Furthermore, it can be used as an appropriate tool for designing efficient, subscription-based partner networks and attractive value propositions for machinery and plant engineering companies.