What’s Driving the Rise of Equipment-as-a-Service?
Understanding the Trends Shaping Equipment-as-a-Service
By: Jubril Ayanbunmi, Investment Director, Baird Capital
The Equipment-as-a-Service (EaaS) model continues to evolve as customers increasingly demand solutions that combine specialist equipment with technical expertise and tech-enabled managed services spanning maintenance, monitoring and compliance.
Key Takeaways
Greater Operational Flexibility
Fully managed solutions reduce operational complexity and provide greater flexibility to respond to changing requirements.
Shift from Capex-to-Opex
Upfront capex is being replaced by predictable opex while preserving the flexibility to scale as needed.
Digitalisation & Tech-Enablement
Connected fleets and data analytics enable proactive monitoring and maintenance, improving asset performance and customer support.
EaaS solutions provide access to mission-critical capabilities without requiring customers to own and maintain specialist equipment or retain the associated know-how in-house, while preserving the flexibility to respond to changing project or capacity requirements. For providers, combining equipment with value-added technical services can increase share of wallet, deepen integration into customers’ operations and support recurring/reoccurring demand through longer-term contracts and framework agreements, resulting in stronger, more embedded customer relationships.
At Baird Capital, we believe that specialist EaaS businesses represent a highly attractive segment of the Industrial Technology market, underpinned by a resilient revenue profile, a sustainable business model, the ability to scale meaningfully through disciplined fleet investment and growing public and private investment in large-scale infrastructure projects. Our confidence in the model has been strengthened through our experience investing in and supporting EaaS businesses, including:
Rapid Energy: A provider of temporary heating and cooling equipment to industrial and commercial customers. Combining specialist equipment with deep technical expertise, turnkey project delivery and a full suite of managed services, Rapid Energy supports both planned and emergency hire situations where continuity of critical operations is essential.
Subsea Technology & Rentals (STR): A provider of mission-critical equipment and services for the offshore energy, infrastructure and marine science markets. STR combines a specialist rental fleet with proprietary technology and engineering capabilities, working closely with customers to develop bespoke solutions for complex marine environments.
Watkins Hire: A provider of industrial and commercial heating and cooling equipment rental services. Watkins supplies a complete range of mission-critical temperature control equipment to a blue-chip client base across a wide range of industries, ensuring the smooth operation of critical processes.
We believe Baird Capital is well positioned to support specialist EaaS providers through their next phase of growth, bringing flexible capital alongside deep sector experience and operating expertise. We focus on supporting high-quality businesses as they invest in their fleets, broaden their capabilities and expand across customers, applications and geographies, while seeking to deliver attractive long-term outcomes for our investors.
Connect with a member of the team to learn more about Baird Capital’s Industrial Technology & Sustainability investment thesis.
