--- title: What Is Servitization? - A Futurist's Perspective description: We are in the midst of a big paradigm shift - more and more services are becoming products. This is what people are calling the servitization. image: https://www.anderssorman-nilsson.com/hubfs/Sharp_Inspire_Expo_Slides_1.jpg --- [![ASN Logo New](https://www.anderssorman-nilsson.com/hs-fs/hubfs/Images_Compressed/ASN%20Logo%20New.png?width=203&height=95&name=ASN%20Logo%20New.png) ](https://www.anderssorman-nilsson.com) # Decoding Tomorrow: Futurism and Foresights Today Foresights and ideas that expand minds and inspire a change of heart. # What Is Servitization? - A Futurist's Perspective Posted by [anders@thinque.com.au](https://www.anderssorman-nilsson.com/blog/author/andersthinquecomau) on November 13, 2015 - [Tweet](https://twitter.com/share) We are in the midst of a big paradigm shift - more and more products are becoming services. This is what people are referring to as the **servitization**. Old manufacturers like [Rolls Royce](http://www.rolls-royce.com/customers/civil-aerospace/services.aspx) and new digital startups are seeing this as an opportunity to customise their offerings, deliver value to their customers during an extended period of time and develop more intimate relationships with customers. --- ![servitization - plane wing over clouds](https://www.anderssorman-nilsson.com/hs-fs/hubfs/Blog/photo-1436491865332-7a61a109cc05.jpeg?width=600&name=photo-1436491865332-7a61a109cc05.jpeg "servitization") *Rolls-Royce have shifted from selling aero engines to selling "power-by-the-hour". * A more accurate definition of the term can be found at [Aston Business School's](http://www.aston-servitization.com/) website: *"The process by which a manufacturer changes its business model to provide a holistic solution to the customer, helping the customer to improve its competitiveness, rather than just engaging in a single transaction through the sale of a physical product."* Rolls-Royce adopted this concept when they launched [TotalCare](http://www.rolls-royce.com/products-and-services/civil-aerospace/services/care-catalogue/totalcare.aspx) which is a service offering where they charge their airline customers a fixed sum per flying hour and in exchange offer predictive maintenance planning, workscope creation and management plus off- wing repair and overhaul activities. This service-based value proposition is very different from the traditional product-based one since it entails delivering value to the customer throughout the product lifecycle and beyond. By having a payment mechanism based on $/ engine flying hour Rolls-Royce secure the maintenance costs of the engines for their customers and consequently transfers cost risks back to themselves as oppose to leaving it with the client. Another example of a manufacturing company that have servitized their product offerings is [Xerox](http://www.blogs.xerox.com/) who introduced "payper-click" scanning, copying and printing of documents. ![What is servitization? - A Futurist Perspective](https://www.anderssorman-nilsson.com/hs-fs/hubfs/Sharp_Inspire_Expo_Slides_1.jpg?width=571&name=Sharp_Inspire_Expo_Slides_1.jpg "What is servitization? - A Futurist Perspective") The new breed of companies, also called digital startups have adopted this way of thinking. If we look at the music industry, for example, we can see that [Spotify](http://press.spotify.com/se/category/latest-news/) and other streaming services have made the traditional business model redundant. The founders behind these companies knew that people were no longer interested in owning a physical CD or even a digital mp3-file - consumers wanted [access, not ownership](https://www.anderssorman-nilsson.com/blog/will-uber-replace-car-ownership-in-the-future).  Today's technology startups have realized that almost anything can be servitized and as a result they are gaining a competitive advantage and challenging big businesses by focusing on outcomes rather than physical products. This means that they are not just engaging in a single transaction through the sale of a product, but instead providing value throughout the product life cycle. Servitization can be an opportunity for businesses to build more initimate and loyal relationships with customers, however it also entails an increasing focus on delivering  seamless [customer experiences](https://www.anderssorman-nilsson.com/blog/how-to-create-an-impactful-brand-experience). ![Anything as a service - Servitization - Futurist](https://www.anderssorman-nilsson.com/hs-fs/hubfs/anything_as_a_service.jpg?width=571&name=anything_as_a_service.jpg "Anything as a service - Servitization - Futurist") Above we can see some successful startups such as Uber, Spotify, AirBnB, Instacart, Seamless, Zipcar and TaskRabbit. What they all have in common is their genuine dedication to delivering great customer experiences, and by doing this they are building strong, intimate and prosperous relationships with their customers.  #### Subscribe to our YouTube-channel to access my  #### latest future trendspots! 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