Convertible Notes and Startup Funding
February 12, 2025
Depreciation is an important concept in capital budgeting. This is because it is a non cash expense and ideally should not have any effect on the cash flows. This is the reason why it is added back during cash flow calculations. Since the amount of depreciation never actually left our bank account in the form […]
Technology all over the world has been advancing at a breakneck speed. Just a few decades earlier, radio was the dominant medium of transmission when it came to sports leagues. Then slowly, the transition from radio to television began. In the past few years, television has turned out to be the predominant medium of transmission […]
Alibaba is a Chinese online retail company. This company started as an Amazon wannabe in the Chinese economy. However, today it would be fair to say that Alibaba is equivalent to, if not bigger than its American counterpart. Alibaba’s rise to economic power is filled with many stories. One of them is the story of […]
Pension funds across the world generally invest in traditional asset classes such as debt and equity. However, over the past few years, many experts have suggested that pension funds should branch out and invest in alternative asset classes. Theoretically, investing in alternate asset classes has many benefits. However, when the pension fund actually starts making […]
In the previous few articles, we have already seen that sports leagues are able to generate a huge amount of revenue from various sources. We are already aware of the sale of broadcasting rights, sponsorships, digital media rights, fantasy sports league rights, and so on. However, it is important to know that marketing and selling […]
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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