A very common form of disruption is to “virtualize” traditional business models by moving them to the internet. Email sent letters with an electronic service, displacing the physical letter monopoly by the postal services, iTunes sold single pieces of music in a download service, displacing the CD records industry, Airbnb did the same to the hotel industry, Uber to the taxi industry, Netflix et al to cable TV, Amazon AWS to the computer server industry. Companies that escaped disruption by virtualized services realized that they needed to jump on the “as-a-service”-bandwagon before being displaced by yet another outside company: Microsoft’s Office 365 and Adobe’s Creative Cloud are such examples. Both were once sold as CDs in a box and now they are sold as subscription services and with features that can be activated online only. 

What is next for this trend? What comes after “software as a service”, “entertainment as a service”, “hospitality as a service”, “mobility as a service”? 

I believe that technologies today enable everything to be offered in a service model: The “virtualizing” of assets and packaging them as a service.

Even factories can be operated in a service model:

Machines need not be sold anymore – they can charge their users for the service of a unit produced. And machines can order spare parts that they need, just in time, when they need them. Machines can even check the authenticity of spare parts by using automated smart contracts. And charge for the spare parts at the moment when they start producing. And the tools used to install the spare part charge their owner for each use. The same for software updates, ordering & executing preventive maintenance and even for the financing of entire production lines. This is not a scenario for the future. Companies already deliver on this and the technologies that make it possible include IoT protocol standards, long-range low power wireless data, Blockchain, and supply chain solutions and providers.

I recently saw the Berlin-based startup ZkSystems pitch at the demo day of the University of California, Berkeley’s Blockchain accelerator and they proposed parts of the scenario above. They presented a use case of a nutrunner, a tool used to tighten screws in the production of cars. This nutrunner has a Wi-Fi connection and writes data to a Blockchain to track precise usage data used for quality and parts tracing purposes. And course to charge the car manufacturer for each manipulation and the parts used. And all this happens automatically and without adding any expensive manual labor.

When even a humble screwdriver can charge its user for services provided and at the same time record impermeable quality data, we have truly reached the age of XaaS, everything-as-a-service.

For more information contact Diana Rees, Co-founder & CEO, at ZkSystems, Berlin: diana.rees@zksystems.io