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Industries ranging from food production to wastewater treatment routinely use compressed air in operations. However, many business leaders understandably want more insights into how much compressed air they use and whether any trends impact the usage.
Those needs led to the compressed air-as-a-service (CAaaS) industry. It generally provides customers with subscription-based access to compressed air. Additionally, they’ll usually get automated, real-time insights about how much they use and other notable trends.
What Does the CAaaS Industry Offer?
The specific compressed air-as-a-service offerings vary by provider. However, the typical arrangement allows a company to upgrade its equipment without capital expenditure. Paying back the technology partner happens over time with the money saved through the improvements.
Such setups appeal to business leaders excited about how technological improvements could help but baulk at the associated expenses. Other as-a-service options have thrived recently due to the flexibility they offer. The energy-as-a-service (EaaS) market is one example that lets customers pay out of an operational expenditures budget. Many CAaaS plans give the same benefit.
Additionally, the CAaaS provider usually pays for all maintenance and repairs. Such companies often use Internet of Things (IoT) sensors to monitor equipment health in real-time. It’s then more likely that a customer could have a technician out to proactively address any issues rather than experiencing an air compressor failure due to an unknown problem.
Another benefit is that compressed air-as-a-service companies typically only bill customers for usage. The transparent fee structure helps business leaders budget for their needs. They can also take quick action once noticing a monthly bill is higher than normal. The ability to have a clear idea of how much compressed air a company uses and not pay for anything else on top of that amount makes the CAaaS option particularly valuable and increasingly in demand.
CAaaS providers also usually apply automation to a customer’s compressed air equipment. Those companies need to know clients’ real-time usage rates and want immediate alerts about whether the equipment is working as expected. Sensors and automated platforms can gather that information.
A Provider Explains Its CAaaS Solution
Qnergy is one example of a company with a CAaaS program. It launched in 2019 at an industry event for the gas sector. Once a client signs up for the service, Qnergy representatives install a compressed air pneumatic system called the CAP3.
Ory Zik, Qnergy’s CEO, explained why this service is relevant now. “Operators are under conflicting pressures to concurrently reduce emissions and cut expenses. We are thrilled to participate at the Gastech Virtual Summit and announce a program that not only offers the best technology but also removes all financial barriers to adoption.”
He continued, "The CAaaS contract is very simple. Qnergy installs a CAP3 system and acts like a utility. We only charge for the usage of instrument air and electricity. We have tested this simple arrangement with a number of operators, and the feedback is extremely positive."
How a CAaaS Provider Digs Into Data for Success
Succeeding as a CAaaS customer or a company that provides compressed air as a service means staying on top of relevant data. One of the benefits of using the CAaaS model is that providers can look at a customer’s current setup and recommend what type of equipment they should use to get the desired gains. It’s then usually possible to rent the chosen models.
A customer might decide to get air compressors that are more energy-efficient than what they previously used after entering into a CAaaS contract. A more efficient compressor may have a higher upfront cost, but it can save companies money in the long run by minimizing wasted resources. Customers that use data this way could track exactly how much energy the equipment saves them over six months, a year or any other span.
A CAaaS provider can also tap into data analytics to better understand customer needs. Kaeser Kompressoren is one example of a company that took such an approach. It had several hundred customers on its compressed air as a service plan as of 2018. Some of them purchased the equipment but paid for ongoing maintenance. Others opted to only use the equipment on a subscription basis and never bought any.
Falko Lameter, the company's chief information officer, said data feeds help Kaeser Kompressoren understand when things might go wrong with customers' equipment. He explained how the company uses machine learning to identify the source of compressor problems, saying, “We've analyzed this because we have this in our streaming data now. We analyze these curves, or the patterns, let's say, and detected some rules of how you can predict this [likelihood of compressor failures].”
He continued, “When we integrate machine learning into our predictive maintenance, the algorithm automatically checks this [data about sources of compressor problems]. This example is one result we have, and we hopefully will get more.”
Lameter also spoke about how data can help optimize an organization and let service technicians make the best use of their time. “When you optimize this organization, this is big money. If a service technician doesn't need to go twice to a compressor, they can do everything with one visit. This is money. This is simple. To optimize the resources that you use in service management.”
The CAaaS Model Unlocks Opportunities
Some people might consider compressed air as a service as a specific offering under the broader manufacturing as a service (MaaS) umbrella. That’s because MaaS provides access to new technologies the customer couldn’t otherwise get without a lot of financing. For example, someone might get IoT sensors or data analytics platforms under their contract.
It also allows company leaders to engage in risk management strategies that are typically impossible when financing the equipment outright. Thiago Figueiredo is the vice president of aftermarket for Quincy Compressor. He gave a 2020 presentation to help customers decide if the CAaaS model is right for them.
Figueiredo clarified, “Sometimes technology is changing so dramatically, and there is so much more efficiency to be gained from a new piece of equipment, that buying new equipment might be the better option. But then again, ask yourself, do I want to have that commitment? The conversations that are being had are around balancing that risk.”
However, he spoke of how compressed air as a service offers an alternative, saying, “ But now the tone of the conversation changes because I'm no longer having to have that balance. I can choose to replace that piece of equipment and benefit from having additional reliability and higher energy efficiency without having the large capital investment.”
Is the CAaaS Model Right for You?
Getting compressed air as a service is not the best choice for every situation. However, many people in the manufacturing sector see it as a compelling alternative. Take the time to think about how your company uses compressed air now and will in the future before deciding to move forward with this option.