DMG MORI STORE – with ADAMOS to the digital point of sale

An interview with Asef Duratovic
Head of Subscription at DMG MORI Digital GmbH

Based on the ADAMOS STORE, the DMG MORI STORE was created as a digital point of sale for all offers under the umbrella of the new PAYZR business model. With PAYZR, the world's leading machine tool manufacturer is implementing a new, digital subscription business model for Equipment-as-a-Service and Software-as-a-Service.

In conjunction with the ADAMOS HUB and the single sign-on concept, customers benefit from the central management of data, applications, licenses and user accounts as well as consistent workflows – even across manufacturer boundaries. We spoke to Asef Duratovic about the specific offerings and the ambitious goal of becoming the “Netflix of Manufacturing.”

Mr. Duratovic, DMG MORI is implementing a new, digital subscription business model with PAYZR. This approach makes it possible to subscribe to software tools and machines instead of purchasing them. What prompted this decision?

Asef Duratovic: In the consumer environment, subscription business models are already a common way to monetize value-added digital services. In fact, for providers such as Netflix and Spotify, their revenue stream structures are the existential core of their business. This mega-trend is now also increasingly spreading to the B2B environment and manufacturing industries.

DMG MORI recognized the signs of the times early on here. As early as 2016, Christian Thönes had already asked in his inaugural speech as CEO how DMG MORI could become the “Netflix for mechanical engineering” and set the corresponding course. Consequently, software-as-a-service offerings have long since become standard at DMG MORI. WERKBLiQ offers a solution for maintenance, based on a certain fee depending on the size of the machine park. PRODUCTION PLANNING & CONTROL from ISTOS and TULIP are also available as subscriptions.

And further entry into subscription models in the area of Equipment-as-a-Service, specifically with the M1 universal milling machine, was the logical next step?

Asef Duratovic: In the future, PAYZR will bring together a very appealing range of products and services. Apart from software, the M1 is the first DMG MORI machine available in a subscription model.

Taken more precisely, it is a hybrid model consisting of a monthly basic fee including an all-round carefree package as well as a usage-based spindle hour fee, the pay-per-use portion.

This is a revolutionary and novel approach in the mechanical engineering sector. Still, were there any role models that DMG MORI could look to for guidance?

Asef Duratovic: In itself, this concept is not so new. For example, Rolls-Royce has been offering such a model for more than 50 years, in which an airline no longer buys an engine, but pays a usage-based fee for an engine provided – based on flight hours.

The mechanical engineering sector may only be at the beginning of a sustained, pronounced subscription development, but the potential and extent of the economic and social changes are already becoming clearly evident. For example, cloud-based services, artificial intelligence or even blockchain technology are paving the way for a variety of radically new types of business models. They are thus increasingly giving rise to new value pools based on data, output or consumption-driven models. Mechanical engineering is equally affected by this change and is by no means immune to it.

So, PAYZR is the equivalent of Rolls-Royce in the machine tool industry?

Asef Duratovic: Only to a certain extent. Just as airlines could focus on getting passengers from A to B, with PAYZR a DMG MORI customer can focus completely on its core business. What is the flight hour for Rolls-Royce is the usage-based fee per spindle hour for PAYZR's Equipment-as-a-Service offering. In addition, we charge a monthly basic fee that covers a full all-round carefree package: Transport, packaging, commissioning, training, all service, spare and wear part costs with annual maintenance as well as machine crash insurance without customer deductible. Loss of earnings insurance is also included. This covers any technical interruption or impairment of the machine's ability to operate as a result of insured property damage.

Which customer groups are targeted by the PAYZR offering?

Asef Duratovic: The solutions offered under PAYZR are always about full planning security and 100 percent price and cost transparency. This is attractive for all customers who want to accelerate their innovation cycles and do not want to or cannot make a long-term investment. For example, given the elimination of investment costs, start-ups and smaller companies can benefit from technology and equipment from the outset that they would not even have dared to think about before. This is true for software and it is equally true for machines.

PAYZR is currently only available in the machine environment for the M1 milling machine from DMG MORI?

Asef Duratovic: Yes, the new 3-axis universal milling machine is the very first machine offered in the new Equipment-as-a-Service business model. It is compact in size, sets new standards in its class in terms of precision as well as performance, and it features the connectivity that is necessary nowadays as standard – in short: The M1 is the ideal entry into modern manufacturing, even more so thanks to PAYZR. The next machine by PAYZR is going to be presented soon at the PRE-EMO Show in Pfronten in September.

As a founding member of ADAMOS, DMG MORI relies on the newly developed infrastructure. How does it work?

Asef Duratovic: An integral part of a subscription model is also the interface to the customer. The DMG MORI STORE powered by ADAMOS constitutes the digital point of sale for all software solutions and machines offered under PAYZR.

Access is easy and available via various channels, such as the DMG MORI website or the customer portal “my DMG MORI,” where “single sign-on” takes you directly to the DMG MORI STORE. All information, editions and prices can be viewed via the corresponding products, and clicking on “Order” will take you directly to the shopping cart. This is also where DMG MORI's applicable privacy policy and terms and conditions are outlined again in summary form.

However, regardless of whether equipment or software, all purchases, licenses, subscriptions and users can be managed centrally in the ADAMOS HUB. The associated payments can be managed in the ADAMOS Control Center.

So, what does the future hold for PAYZR?

Asef Duratovic: Both in the area of Software-as-a-Service and Equipment-as-a-Service, we will gradually introduce further products. The combination of ADAMOS STORE and ADAMOS HUB provides us with optimal conditions for this scaling process. In addition, we have plenty of ideas and potential for development to offer DMG MORI customers additional added value by incorporating complementary products and services.

Dear Mr. Duratovic, thank you very much for the interview.