How a product-as-a-service model can reduce business and environmental costs

How a product-as-a-service model can reduce business and environmental costs


The amount of waste generated worldwide is increasing every year – thanks to companies’ failure to recycle reusable resources. A product-as-a-service model that processes goods and services in a radically new way can lead to sustainable product management practices. We hear from Mark Waas, Director of Strategic Sales UK, Northern Europe, Middle East and Africa at CloudBlue, about the need to move to a future-proof PaaS model to reduce environmental impact.

The typical linear process of product creation, sale, transportation, and disposal is clearly not sustainable. E-waste alone adds up to 50 million ton waste stream all over the world every year. Many products are designed to end up in landfills, while others that may be reused or reused are thrown instead. This is what we call a linear economy where consumers are the owners of tangible goods, and manufacturers are no longer responsible for their maintenance. To limit this practice, a product-as-a-service approach should be used.

See more: Top tips on improving IT efficiency and lowering your energy bills

An idea, also known as product service systems, is a combination of products and services. Companies add more features to both products and services in order to reuse or recycle them and increase their longevity. PaaS solutions are available in subscription forms as well as services. Consumers subscribe to the product and submit monthly costs.

In a conversation with Spiceworks, Mark Waas, Director of Strategic Sales UK, Northern Europe, Middle East and Africa at CloudBlue, outlined the concept of PaaS in more detail. It explains how companies can reduce their environmental impact by shifting to a future-proof PaaS model.

How a product-as-a-service model can reduce business and environmental costs

What exactly is a product-as-a-service model?

The circular economy requires companies to rethink their business model to build value in producing and operating products, and decommissioning and recycling products.

To participate in a circular economy, companies must evaluate alternative sources of income along with the production of new products, including revenue generated from the value embedded in the products. As a result of the new “product-as-a-service” model, companies are investing in processes to extend the life of a product, making it easier to recycle it and offering consumers incentives to return used products.

The concept of circular economy

Caption: Circular Economy Concept | Source: Wikipedia

How can companies reduce their environmental impact by shifting to a futuristic PaaS model?

A circular business model is sustainable only if the value can be economically recovered from the product, which can be achieved through material reuse or recycling. While PaaS models drive innovation, returns and recycling costs can also be high.

Collaborative initiatives and innovative approaches are needed to reduce these costs and stimulate returns to end-of-life electronic devices, which are already the world’s fastest growing waste stream.

Changing the mindset from ‘use it once and then discard’

There is no unlimited supply of materials. Because of this, many companies are beginning to switch to the circular economy model to change the “use it once and then ignore” mentality. In a circular economy, waste and pollution are restricted in the design stages, products and materials are kept in use for longer, and natural systems can regenerate. Each year, more companies are adopting this platform and transitioning to a circular economy production system to become more sustainable – and reduce operating costs in the long run.

Furthermore, training is also required within the company to ensure participation across the workforce, and the timely use and disposal culture is eliminated.

How to extend product life and reduce environmental impact?

The current consumption model is to eliminate and replace broken products as quickly as possible, often without considering the potential to extend the life of the product. Here are some suggestions to extend the shelf life of your products:

  • Organizations must implement innovative and automated systems that combine hardware and software. These integrations speed up the device’s rating rate so that it can be resold, reused or, if a lower grade, recycled. In addition to accelerating the rating rate of devices, these systems can also improve cost-effectiveness and accuracy to help extend device life and improve the global waste problem.
  • Companies must work hand in hand with industry leaders and supply chain professionals to work towards embracing a circular economy around the world and help tackle the growing global waste problem.
  • Extend the shelf life of products. Trying to fix it is a simple and non-hazardous process or with the help of a professional.
  • When there is no possibility to extend the life of the product, try to find an alternative purpose and function.
  • Inclusion of new functions and services. This means that new product features and services may help the company meet the changing requirements of its customers, compete with them, and renew its brand.

See more: The unexpected role of 5G networks and telecoms companies in helping industries reduce carbon emissions

Home Takeaway

PaaS can help companies become more sustainable and resilient while at the same time ensuring profitability. The concept will expand further as more and more companies and customers adopt this framework. Many large companies are already taking measures to move to a product-as-a-service model, which allows users to subscribe to their products instead of buying them. Although production techniques may not change significantly, the way we communicate with consumers and manage the life of a product will change.

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