How a Product-as-a-Service Model Can Reduce Business And Environmental Costs


The amount of waste generated worldwide is rising every year – thanks to corporations’ failing to recycle reusable resources. A Product-as-a-Service paradigm that treats goods and services in a radically new way can usher in sustainable product management practices. We hear from Mark Wass, strategic sales director, UK and North EMEA at CloudBlue, about the need to transition to a future-proof PaaS model for reducing environmental impact.

The typical linear process of product creation, sale, transportation, and disposal is clearly unsustainable. E-waste alone adds up to 50 million tonnesOpens a new window to the worldwide waste stream each year. Too many products are engineered to end up in landfills, while others that may be repurposed or reused are tossed instead. This is what we call a linear economy where consumers are the proprietors of tangible goods, and manufacturers are no longer accountable for their upkeep. To limit this practice, the Product-as-a-Service approach should be employed. 

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The idea, also known as product-service systems, is a blend 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 models coupled with services. Consumers sign up for the product and submit monthly costs. 

In a conversation with Spiceworks, Mark Wass, strategic sales director, UK and North EMEA at CloudBlue, outlines the concept of PaaS in further detail. He explains how companies can reduce their environmental impact by switching to a future-proof PaaS model.

How a Product-as-a-Service Model Can Lower Businesses & Environmental Costs

What exactly is a Product-as-a-Service model?

A circular economy requires enterprises to rethink their business model to build value in producing and commissioning products and decommissioning and recycling the products.

To participate in a circular economy, businesses must evaluate alternative revenue streams besides producing new products, including revenue generated from the embedded value in products. As a result of the new Product-as-a-Service model, businesses are investing in processes to extend product life, making them easier to recycle and offering consumers incentives to return used products.

Caption: A Circular Economy Concept | Source: Wikipedia

How can companies reduce their environmental impact by switching to a future-proof PaaS model?

A circular business model is sustainable only if the value can be economically recovered from the product, which can be realized by reusing or recycling the materials. While PaaS models are driving innovation, the costs of returns and recycling can also be high. 

Collaborative initiatives and innovative approaches are required to reduce these costs and incentivize end-of-life returns of electronics, which have already become the world’s fastest-growing waste stream.

Shifting mindset from “use it once then discard”

There is no limitless supply of materials. Because of this, many businesses have begun to turn to the circular economy model to change the “use it once then discard” mentality. In a circular economy, waste and pollution are limited at the design stages, products and materials are kept in use longer, and natural systems can regenerate. Every year, more businesses embrace this platform and transition to a circular economy production system to become more sustainable – and reduce long-term operating costs.

Further, training is also required within the business to ensure the buy-in across the workforce is there and the culture of use and discard is eradicated in time. 

How to extend product life and reduce environmental impact?

The present consumption paradigm is to dispose of and replace broken products as soon as possible, frequently without considering the prospect of prolonging the product’s life. Here are some suggestions for extending the functional life of your products:

  • Organizations should implement innovative and automated systems that combine hardware and software. These integrations speed up the rate of device grading so they can be resold, reused, or recycled if they are a lower grade. In addition to speeding up the rate of device grading, these systems can also improve cost-effectiveness and accuracy to help prolong device lifetimes and improve the global waste issue.
  • Companies must work together with industry leaders and supply chain professionals to work towards adopting a circular economy throughout the globe and help tackle the rising global waste issue.
  • Extend the shelf life of products. Attempting to fix them is a simple and non-hazardous operation or with the assistance of a professional. 
  • When there is no possibility of extending a product’s life, try to find an alternative purpose and function.
  • Include new functions and services. This implies that new product features and services may help a firm satisfy the changing demands of its consumers, compete with them, and rejuvenate its brand.

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Key takeaway

PaaS can help companies become more sustainable as well as resilient while at the same time ensure profitability. The concept will expand more as more and more companies and customers adopt this framework. Several large corporations are already taking measures to migrate to the Product-as-a-Service model, which allows users to subscribe to their products rather than buy them. Although the production techniques may not change significantly, the way we connect with consumers and manage product life will.

Can adopting PaaS help tech companies drop their carbon footprints? Let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!