The difference between Platform-as-a-Service (aPaaS) & Product-as-a-Service (PaaS)

Have you ever wondered what PaaS means? Two main acronyms stand out: Platform-as-a-Service & Product-as-a-Service. In this blog, we'll explain the difference.
Simon Rombouts
March 2, 2020

Have you ever wondered what PaaS means?

Well, actually it can mean a number of things. But two main acronyms stand out:

  • Platform-as-a-Service
  • Product-as-a-Service

Let’s start with a brief explanation of Platform-as-a-Service.

(application) Platform-as-a-Service (aPaaS):

Platform-as-a-Service, also called application Platform-as-a-Service (aPaaS), is an extension to the Software-as-a-Service (SaaS) model. Platform-as-a-Service allows for the use of applications hosted remotely through cloud computing or other software. It provides a platform to run (business) applications on. It is also used to develop, deploy and control the complexity associated with building and maintaining the (entire) infrastructure surrounding any IT-application, as you don’t have to deal with physical servers and hardware anymore.

Since the underlying IT-infrastructure is already written, coded, tested, and optimized, a Platform-as-a-Service can provide a low-code environment where no developer is needed to create customer value. Both Platform-as-a-Service and Software-as-a-Service can be considered subdomains of Infrastructure-as-a-Service (IaaS). 

Product-as-a-Service (PaaS):

In contrast, Product-as-a-Service (PaaS) is a business model that focuses on combining tangible products with intangible services, where the ownership of the product is not transferred to the customer or end-user. Other terms used for Product-as-a-Service can be a Subscription Service, Access-Based Consumption, or Product-Service System. In a Product-as-a-Service, you pay for what you need or use. You pay for the functionality that the product delivers and not necessarily for the product itself. 

A Product-as-a-Service has numerous advantages
When the ownership of a product is not transferred, there is an incentive for the PaaS-provider to keep products in circulation longer, saving on materials, energy, and other resources. Creating a positive impact on resource consumption and reducing waste, creating a more sustainable way of delivering value for customers.

Furthermore, PaaS can provide more business value and enhance customer satisfaction. This is done mainly through the additional services that provide convenience to the customer, but also through smart connected products. When usage information is provided to the manufacturer, user-advice can be given increasing the performance and lengthens the lifetime of the product. Additionally, preventative maintenance can easily be applied. This does not require significant IT-infrastructure to be built, but you can add some existing layers to your current system, that companies like Firmhouse provide.

Since you will have frequent client contact, your product can be adapted to fit the needs of your customer better. In the mean time your relationship with client will be strengthened. PaaS provides a recurring income stream for companies and arranges low barriers of entry to new customers, since there is no initial investment needed from the clients perspective. 

In summary, Product-as-a-Service (PaaS) presents opportunities for companies to increase its revenue, enable product customization, provide recurring revenue streams, deliver higher value to customers by allowing them to pay for what they consume, increase sustainability and circularity of the product, and ultimately, broaden end-to-end experience with more in-depth insights and lower operational costs. This can overall increase the product-lifetime profitability.

Want to know more? Or ready to launch a Product-as-a-Service proposition? Sign up on our website and start trying our products, or you can contact our team for a more tailored solution.

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