Convertible Notes and Startup Funding
February 12, 2025
Infrastructure projects last for many years. As a result, different sources of funding are used at different points of time in the project. As mentioned in the previous articles, most of the time, bank loans are used during the construction phase of the project. However, at the same time, bonds are the preferred source of […]
Whenever a person from the baby boomer generation hears the term pension plan, they refer to defined benefit pension plans. Defined benefit pension plans were the predominant type of pension plan just a few decades ago. In the 1980s, defined benefit plans accounted for over 80% of all types of pension plans which were offered […]
Traditional financial analysts would consider a negative working capital i.e. having more current liabilities than current assets, a sign of imminent danger. This view was deep rooted in the belief that a company must always have sufficient cash on hands to meet its short term liabilities failing which the credit will dry up and the […]
The commercial banking industry is undergoing a rapid transformation. This transformation has been enabled by the increasing use of digital technologies in the commercial banking industry. Open banking has become a game changer when it comes to the field of commercial banking. It has enabled the use of many other modern banking solutions. Multi-banking is […]
When we talk about social media, we often refer to companies like Facebook, Instagram, Twitter, and LinkedIn. However, in the past few years, another company has emerged as a huge player in the social media space. This company has created an application that is known for having high levels of user engagement. The application being […]
The Product as a Service (PaaS) business model is poised to change the business world in a big way. There are many traditional industries that are being disrupted by this model. Start-ups, as well as established corporations, are all taking steps to adopt this model. Many industries such as automobiles and electronics are likely to be fundamentally transformed by this business model. This is the reason that venture capitalists are looking to fund more companies that are built upon the Product as a Service (PaaS) business model.
Hence, it is important to understand the advantages of this model in more detail. In this article, we have listed the most important advantages of the Product as a Service (PaaS) business model.
The Product as a Service (PaaS) business model is highly popular because of the advantage it offers to both parties. The details of the advantages have been mentioned below:
Advances in the “internet of things (IoT)” are making it possible to collect data from various kinds of machines and then analyze such data. Hence, companies are in a position to move from preventive maintenance to predictive maintenance. This means that companies can maintain vehicles and other equipment better than the end-users. They can use these economies of scale to make the model more affordable to the end-users without actually cutting down on their profitability.
With the advent of the Product as a Service (PaaS) business model, there is no need to borrow money and take on the liability. Instead of making monthly payments to the finance company, they can make the same payments to the manufacturer, and that too without any commitments or obligations! They can stop making the payment at a short notice and they will not owe the manufacturer any money since they were paying subscription fees and not loan installments.
Given the long list of advantages, it should come as no surprise that a lot of start-up companies are being built around this concept. Some of these companies have already gone on to become unicorns.
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