PAYZR BY DMG MORI
As a holistic pioneer of digitization, DMG MORI now opens up the world of data-based business models for its customers with PAYZR, based on subscription and pay-per-use. In this Technology Excellence Interview Christian Thönes, Chairman of the Board of DMG MORI AKTIENGESELLSCHAFT and Asef Duratovic, Head of Subscription at DMG MORI Digital, describe the basic aspects of the new As-a-Service models for software and machines as well as special features of the Equipment-as-a-Service offer for the new 3-axis M1 milling machine.
So-called As-a-Service offers are considered the business models of the future – at DMG MORI as well. Why now?
Asef Duratovic: Two aspects must be mentioned here. Firstly, the recent past has shown clearly just how important the attribute resilience is for companies. And this is exactly where PAYZR can make a decisive contribution in helping customers with their strategic orientation. There is no investment risk and no long-term capital tied up, but instead maximum planning certainty thanks to price and cost transparency and complete flexibility.
Christian Thönes: Secondly, as a global one company we have invested an enormous amount of time and money here and put our heart and soul into it. Most especially DMG MORI has pushed ahead the development and expansion of its digital architecture enormously and boosted the overall clout with “Architecture First”.
Christian Thönes: “Architecture First” describes the solid basis of our digital end-to-end solutions from a single source – always flexibly networked from the work area through to digital ecosystems. The functionality extends from the connectivity of machines via the IoTconnector, with which current information on program status, performance and quality can be communicated securely in real time, and on to interfaces in the leading IIoT platforms and to the new customer portal my DMG MORI. PAYZR now brings together this end-to-end holistic approach in the hotspot of data-driven business models. In this way we create exactly the innovative freedom that customers need to design their digital transformation with planning certainty and so respond adequately to the challenges posed by the new normal.
Asef Duratovic: The area Equipment-as-a- Service also reflects the holistic approach in particular in the interaction of DMG MORI Finance as the investor in the machine, DMG MORI Digital as 360° digitization and service partner and ADAMOS as the integration platform and secure data room for the new DMG MORI STORE, our digital point of sale for all PAYZR offers.
What products are available for customers in the DMG MORI STORE?
Christian Thönes: Where Software-as-a-Service is concerned we currently offer our customers cloud-based products from the manufacturer-independent service and maintenance platform WERKBLiQ, from ISTOS in the field of PLANNING & CONTROL plus the manufacturing platform of our partner TULIP.
In the area of Equipment-as-a-Service we are focusing initially on our offer for the 3-axis M1 milling machine. The general approach with PAYZR is that we will expand our range of services for customers continuously in the coming months and years.
What can customers understand specifically by the term Equipment-as-a-Service?
Asef Duratovic: In the case of Equipment-as-a-Service, we make the M1 available to our customers as a service, which is billed flexibly based on use. One difference to the normal Software-as-a-Service offers is the hybrid billing model.
Hybrid billing model?
Christian Thönes: Hybrid because we chose a combination of subscription and pay-per-use to get started. Our customers pay a monthly fee, which depends on the configuration and the duration of the contract, and includes an all-round carefree package. These include, for example, packaging and transport, commissioning, training, all service and maintenance costs as well as a machine crash and loss of earnings insurance. All that remains to be paid is the usage-based fee per spindle hour used.
“Loss of earnings insurance” sounds interesting ...
Asef Duratovic: Loss of earnings insurance means: If the M1 is temporarily out of operation, completely or partially, due to insured damage, so that the customer is not able to use the machine, the financial loss of interruption will be compensated. What is also interesting is that the all-round carefree package does not include any obligation to use the minimum number of spindle hours.
What contract duration options are there?
Christian Thönes: We offer terms of 12, 24 and 36 months, which can be extended by 12 months respectively. The short contracts offer our customers a high level of flexibility and especially complete freedom in always using the best and most innovative technology. Flexibility and freedom also apply to the end of the contract. If the contract is not extended, the customer can either purchase or return the machine.
And what do customers actually pay for the M1?
Asef Duratovic: The monthly subscription fee for a 36-month contract for the M1 amounts to just € 599.00 plus a fee of € 5.99 per spindle hour.
What sounds attractive can quickly become too expensive with high usage rates, can’t it?
Christian Thönes: No, not with the integrated expenditure cap! This ensures quite literally that no PAYZR user is charged excessively for their machine. In practice the customer has a special right of cancellation, whereby the machine can become his property if a defined cap is reached!
So until then the machine in fact remains the property of DMG MORI?
Asef Duratovic: Yes, strictly speaking DMG MORI Finance is the owner. But it all remains in the family, an additional boost to the trust of customers in the PAYZR model. We as the organization then take care of all other services – from delivery of the machine to the 360-degree service and on to include the acquisition of usage data for billing.
All that remains is how customers get their M1 with PAYZR.
Christian Thönes: Quite simple! The customer only has to register for it in the DMG MORI STORE once. They open the configurator there, select for example the M1 complete for 36 months as the new milling machine and if required adds individual options. All that needs to be done after that is finalize the order in the shopping cart and carry out the obligatory credit and identity check. After that: Enjoy milling.
Its sounds as if PAYZR could become DMG MORI’s predominant business model in its external relationship with customers?
Asef Duratovic: We are convinced of that, if nothing else by virtue of PAYZR being a unique solution for customers that offers planning certainty through price and cost transparency as well as complete flexibility. It also gives customers the chance to always utilise the latest technology, instead of watching a purchased machine slowly lose its value and competitiveness.
Despite all the indisputable benefits, the change in the mindset of customers from ownership to usage is not going to happen overnight, so we will continue to offer the purchase of the machine as well as offering financing or leasing.
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