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Articles

Lessor’s Role in Equipment as a Service: Driving the Future of Asset Access and Utilization

Athena Fintech
09/03/2025

Users want to use heavy and expensive plant and machinery without taking ownership. This is called Equipment as a Service (EaaS). Users or customers need to productively use the equipment without incurring the capital expenditure; they are obligated to pay for the periodic rent. EaaS enables lessees to use the latest technologies without incurring the upfront cost.

The equipment owner is the lessor, who may be the manufacturer, their financial services arm, or an independent lessor. As the owner, you take on the responsibility of not just providing the equipment but also operations and maintenance. This new role is pivotal for lessors who want to operate in this space.


Understanding the Shift from Ownership to Access

Manufacturers requiring capital investments have traditionally purchased equipment or entered into a financing arrangement, such as a loan or a lease. This made the buyer responsible for maintenance, usage, and disposal, as well as complex upgrades when new technologies are introduced.

EaaS changes this dynamic by procuring the rights to use the equipment in place of owning it. As the lessee, you may decide to procure the equipment and manage the maintenance yourself or include it in the agreement terms for the lessor to maintain, with a certain level of performance.

In the airline industry, lessees of aircraft may enter into dry or wet leases. A dry lease arrangement is when the aircraft owner provides the aircraft without the crew. In a wet lease, the aircraft owner may provide part of the crew, including uptime and performance.


Beyond Financing: The Expanded Lessor Role

With EaaS, the lessor’s role has changed from provider of capital, managing the asset title, and collecting payments to a more active participation in the asset lifecycle.

Performance guarantees are driving the need for the lessor to configure the optimal set of equipment, plan for proactive maintenance, and, in some cases, provide compliance and upgrades.

An example is in telecommunications infrastructure. The telecom service provider may outsource the switching system on an EaaS arrangement to one of the manufacturers of telecom systems. EaaS could include guarantees on uptime, performance, expansion, and upgrades.


Technology as the Backbone of EaaS

Technology has been an enabler of EaaS. Using the latest technologies mentioned below, the equipment is monitored continuously.

IoT devices
are used to monitor a wide range of parameters like temperature, humidity, air quality, energy consumption, and machine performance. The data generated is analyzed in real time to identify patterns, trends, and anomalies that can help businesses optimize their operations and improve their bottom line. Telematics offers more comprehensive fleet management capabilities than GPS, including fuel efficiency analysis, predictive maintenance, and driver safety monitoring.

These technologies can assist lessors with predictive maintenance, reduce downtime, and enable them to meet their service guarantees. Scalability allows lessees to increase their capacity to meet seasonal surges in demand.


Risk Management in the EaaS Model

In the solar energy industry, payments may be tied to power generation by the system. The change in risk profile from financing to performance is crucial, changing the way deals are evaluated and approved.

Office equipment has a cost-per-copy model, where the lessor prices the deal based on use. The lessee is charged based on the number of copies generated. The lessor is not only responsible for the equipment but for supplies and consumables as well.

Technological obsolescence, wear and tear, and remarketing at the end of useful life play crucial roles in the development, evaluation, and running of EaaS programs.
In the energy and medicine industries, the compliance aspect has a substantial impact.


Industry-Specific Applications

EaaS applies to many industries. Take the case of hospitals, they can use expensive diagnostic imaging equipment on a pay-per-use basis that fits the EaaS scenario.
The lessor would be responsible for the equipment, its installation, and maintenance. The hospital can tie its expenses to income by paying based on usage.

Similarly, vehicle fleet operators could procure vehicles on EaaS so that the lessor is responsible for maintenance, insurance, etc., whereas the lessee can service their customers’ needs.
With EaaS, the lessor is transforming itself into a strategic business partner.


Lifecycle Optimization: Getting More from Each Asset

On the other hand, the lessor can optimize their value from each equipment throughout its life using EaaS.

Newer equipment is routed to lessees who are willing to pay premiums, while older or traded-in equipment is for lessees opting for value deals.
Lessors can increase their value to manufacturers by creating a robust trade-up program. In addition, they can actively participate in the after-market, increasing the value of the manufacturer’s equipment.Take the example of construction, contracts may be at many different locations. Local lessors can provide the equipment for a project to save the expensive transportation costs of this heavy equipment.Utilizing new technologies, both lessors and lessees track the performance and utilization of equipment. Investment in technology is a necessity to keep up with frequent enhancements being made.


Looking Ahead

EaaS as a concept is developing. It has more adoption in some industries than others. Construction, office equipment, and medical have had some variants of EaaS.Now technology is adopting this model with hyperscalers like AWS, Google, and Azure providing computing infrastructure. AI is available based on tokens.The performance-based model, rather than pricing based on usage, is being preferred in some business scenarios. Lessors need to track this evolution to fine-tune their offerings based on the business needs of lessees.


Conclusion

Lessors are viewing Equipment as a Service as a strategic differentiator rather than just another solution. Building the knowledge and expertise to install, manage, service, and remarket this equipment is needed to make the transition. Lessors who invest will ride the wave and become a strategic partner in place of just a finance provider to the lessee.



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