Which AI Business Models Can Generate Revenue?

According to the Machine Learning 2021 study by IDG, 32 percent of companies see machine learning and AI as an opportunity to develop new business models. 35 percent associate it with the possibility of developing new products and services. While this sounds good in theory, the practical question remains: how can you concretely earn money with AI innovation? We have compiled 3 ideas for the machinery and plant engineering sector.

Pay-per-part

With this business model, the buyer acquires a machine including an associated service contract free of charge. In return, they pay the provider a fixed amount per manufactured part. To be able to offer an economical and competitive price per part, the provider needs an optimized cost structure for their machine in operation. An AI-optimized process design including predictive maintenance to reduce service calls and downtime enables the provider to operate the leased machine more efficiently than the buyer could independently. This efficiency gain constitutes the essential new or additional business for the provider compared to the traditional sales model. TRUMPF, for example, offers this model for its machines and systems, even with a performance guarantee on operational use.

App Store

A business model already widespread in the consumer sector is the app store. In an app store, customers can obtain a constantly growing number of useful software applications (apps) for their hardware, such as for their smartphone. This can naturally be applied to machines and systems as well, once they are connected to your digital infrastructure or delivered directly with appropriate access. Your customers can then, for example, add applications for automatic condition monitoring or predictive maintenance and pay for them monthly, per use, or with a one-time software license purchase. In the VDMA study "Startup Radar Artificial Intelligence," you will find 2 practical examples for process monitoring and predictive maintenance. The study can be requested by members at future@vdma.org.

Accelerate development cycles

With this business model, your customers pay with data and you accelerate your internal product development with this data. In practice, this means you provide your customers with useful software or apps free of charge, and in return, your customers grant you the right to use the data generated in the process. You can use this data to gain valuable insights into the behavior of machines and users in the field, for example through AI analysis. As an expert in the machine, no one will benefit more from this information than you. Instead of having to laboriously and time-intensively replicate real-world behavior in the development laboratory, you receive the truth directly and enriched with intelligent analysis from your customers.

AI innovation pays off

Innovation with AI opens the door to new digital business models. With this, you can build a second pillar alongside hardware sales and bind your customers with new digital offerings before they look to third-party point solutions. The chosen business model should be individually tailored to you and your customers. If you are looking for a partner to support you in designing the right business model and to accompany your team in product development, we would be happy to hear from you.