As a Service: A New Circular Business Model
Published on 1 January 2020
Publication
A CSTC article exploring the as a Service concept in construction: instead of selling a product, businesses provide a function or service (e.g., “Light as a Service”). This model entails ongoing technical monitoring, real-time adjustments, maintenance or reuse of equipment, and improved end-of-life recovery.
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The article highlights as a Service business models, wherein the provider retains ownership of equipment (e.g., LED lighting) and charges the user for its use or function, rather than selling the product outright. In construction, this can be applied to HVAC, elevators, and lighting (Light as a Service).
This approach fosters circularity:
The supplier is responsible for maintenance, maximizing product lifespan and reducing environmental impacts.
End-of-life waste handling (recycling or reuse) is the supplier’s responsibility, driving circular solutions.
Key requirements include:
Clear agreements on data monitoring (equipment status, consumption), alerts, and response times.
Deciding on product destination at end-of-life (recycling, refurbishment).
Upfront investments (largely by the provider) and rethinking financial flows.
Ultimately, clients pay for performance (e.g., a level of illuminance or comfort) without worrying about equipment servicing, while suppliers gain recurring revenue and an ongoing relationship with the site – a model that strongly supports circular objectives.