Is Economies of Scale Driving Everything as a Service?

Everything as a Service (XaaS) is commonly understood as the general tendency to replace sales contracts with service contracts. Most research in this area agrees that XaaS is a trend, but it points to many drivers. It could be strategies improving customers’ expense model, servitization strategies, customer feedback, mass customisation, and machine learning. However, we do not find contributions considering the relationship between XaaS and economies of scale. When sales contracts are replaced by service contracts, ownership is elevated from the customer to the provider. Thus, possible benefits from economies of scale linked to the ownership of products are then also elevated from the customer to the provider. In this article, we consider the claim that economies of scale may be an underlying driver of the XaaS trend. A review of 140 firms shows that the products with the greatest potential for economies of scale are the ones most frequently provided as a service. This suggests that economies of scale linked to ownership are an underlying driver of XaaS. Thus, ownership-related economies of scale may be a predictor of XaaS.