Is Economies of Scale Driving Everything as a Service?

Everything as a Service (XaaS) is commonly understood as the general tendency to replace sale contracts with service contracts. The literature points to many advantages of XaaS. 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 is 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 is an underlying driver of XaaS. Thus, ownership related economies of scale may be a predictor of XaaS.