For years, manufacturers had an edge with their installed base. But with AI, data, and platforms reshaping the landscape, competition is intensifying. Customers now have more options, and traditional service models are under threat. To stay ahead, service leaders must solve broader customer problems, differentiate, and integrate into new ecosystems. How will your business adapt?
For decades, most service businesses in manufacturing have enjoyed a natural advantage—an installed base of equipment and proprietary expertise that created a near-captive market. Customers relied on original equipment manufacturers (OEMs) and their service divisions for maintenance, spare parts, and technical support. This model has ensured steady revenue streams and strong customer relationships, reinforcing the idea that service is a defensible business.
But what happens when this captive market is no longer captive?
The competitive landscape for industrial services is shifting, and the pace of change is accelerating. The rise of digital technologies, artificial intelligence, and platform-based solutions is beginning to break down traditional barriers. Customers will soon have more choices than ever, as third-party providers, tech firms, and even customers themselves develop alternative service models. The competitive advantage once rooted in product ownership is starting to erode, forcing service providers to rethink their strategies before it's too late.
The Changing Nature of Competition
New competitive threats are emerging and will continue to reshape the market:
These shifts mean that protecting the installed base will no longer be enough. Companies that thrive will be those that proactively differentiate their services and establish a strong position within the evolving service ecosystem. Winning in this changing environment requires a strategic pivot—from merely maintaining equipment to delivering tangible business outcomes, integrating into platform-driven ecosystems, and continuously evolving to meet shifting customer expectations.
The battlefield of service competition is moving beyond product ownership. The question now is: How will service leaders prepare for what’s coming?
Service companies are facing a profound shift in how competition works:
This shift is particularly significant for customers that operate production lines assembled from equipment of multiple brands. Managing fragmented access to their systems across many vendors is becoming a challenge, creating an opportunity for new service models that integrate solutions more holistically. Many customers will increasingly demand a unified approach to managing their production lines and processes, requiring deeper integration and interoperability across brands.
Competition is no longer just about other OEMs. The real challenge is the emergence of alternative ways to solve customer problems as they transform their own operations. Winning in this new environment will require service businesses to rethink their role—not just as equipment maintainers, but as strategic partners in their customers’ evolving ecosystems.
Many service providers still believe their technical expertise, proprietary spare parts, and long-standing customer relationships will continue to protect their business. This assumption is dangerous.
For years, customers had little choice but to rely on OEMs and their service teams. Spare parts were brand-specific, diagnostics required expert knowledge, and alternative service providers lacked the necessary access to equipment data. But this dynamic is changing. Customers now have more options than ever—options that promise lower costs, greater flexibility, and better performance insights. The traditional lock-in effect of the installed base is weakening, and service providers who fail to adapt will struggle to compete.
One of the biggest risks is overconfidence in the existing service model. Companies that focus too much on defending traditional revenue streams—like selling spare parts, performing scheduled maintenance, or offering reactive repairs—may find themselves outpaced by competitors who offer predictive, data-driven, and outcome-based solutions.
Another overlooked challenge is the increasing capability of customers to manage service internally. Many industrial companies are investing in IoT, AI, and digital platforms to optimize performance, anticipate failures, and reduce reliance on external service providers. The more self-sufficient customers become, the less they will need traditional service contracts.
Finally, service providers often underestimate the growing role of digital platforms and system integrators. Many companies no longer want a collection of disconnected service agreements; they want a streamlined, integrated approach. Third-party platforms and service aggregators are stepping in to fill this gap, offering customers a single point of access to multiple service providers—often at a lower cost and with greater convenience.
The reality is clear: the competitive pressures on service providers are mounting. The companies that thrive in this new landscape will be the ones that rethink their service strategies, embrace digital transformation, and proactively create new value beyond traditional service offerings. Those that fail to adapt risk becoming obsolete.
Service providers can no longer afford to think of their role as just "keeping machines running." To remain competitive, they must become problem-solvers at a business level—helping customers achieve their strategic objectives, not just maintaining equipment.
Customers are looking for partners who can help them reduce costs, improve operational efficiency, and increase output quality. This requires service providers to move beyond traditional maintenance and instead focus on outcome-based services that align with customer priorities:
This shift demands new capabilities. Technical expertise alone is no longer enough. Service providers must invest in industry knowledge, digital tools, and AI-driven analytics to provide insights that go beyond basic asset management. Customers will increasingly expect solutions tailored to their entire operation, not just their equipment.
A strong example of this shift is MAN Trucks, which moved beyond simply servicing vehicles to helping fleet operators optimize their business performance. One of the biggest costs in trucking is fuel consumption, often accounting for more than 30% of total operating expenses. Instead of focusing solely on vehicle maintenance, MAN Trucks leveraged data from onboard sensors to analyze driving behavior and optimize fuel efficiency.
By providing fleet owners with actionable insights on driver performance, route optimization, and vehicle usage patterns, MAN enabled customers to cut fuel costs significantly—directly improving their margins. This type of approach demonstrates how service providers can create deeper, more valuable relationships with customers by focusing on solving pressing business challenges, rather than just maintaining assets.
For manufacturing service providers, the lesson is clear: future success depends on solving market problems, not just servicing equipment. Companies that embrace this mindset will lead the next era of service competition.
Traditionally, service businesses in manufacturing were built around serving the installed base—providing maintenance, spare parts, and support for customers who had already purchased equipment. However, as competition intensifies and technology enables more flexible service models, the opportunity to serve entirely new customer segments is growing.
Service no longer has to be tied to product ownership. With the right expertise, data, and digital capabilities, service providers can create new revenue streams by offering standalone services—even to companies that have never bought their equipment. Some key opportunities include:
By expanding beyond the traditional customer base, service providers can unlock entirely new sources of growth. Those that cling to legacy models—where service is only offered to their own product buyers—risk missing out on emerging markets where expertise, not equipment ownership, determines success.
As service markets evolve, competition will not just be between individual companies, but between entire ecosystems. The most valuable service providers will be those that secure a strong position within platform-driven and integrated solutions, rather than operating in isolation.
In the future of industrial services, success will depend on how well a company integrates into broader digital and service ecosystems. There are two main ways to achieve this:
The biggest risk in a platform-driven world is becoming a commodity provider—one of many interchangeable suppliers offering the same basic services. To avoid this, service companies must:
For service providers, winning in a platform-driven market is not just about offering a good service—it’s about securing a valuable, defensible position within the broader ecosystem.
The landscape of service competition is changing faster than ever before. Historically, manufacturers could rely on their installed base, proprietary knowledge, and customer relationships to keep competitors at bay. But that safe moat is shrinking. Today, customers have more choices than ever, from third-party service providers to digital platforms, and even the capabilities to self-manage their services using data and AI. This fundamental shift is forcing service leaders to rethink their entire approach.
How could you redefine your service business?
How can you position your company not just as a provider of service, but as an essential partner in solving your customers’ most pressing problems?
Could you leverage data, AI, and platform-driven solutions to deliver greater value and become indispensable?
Or, could you even rethink your entire business model to align with these evolving trends?
The competitive landscape for service businesses is rapidly evolving, and staying ahead of the curve is critical to securing your company’s future success. That’s why we invite you to join us at this Service Transformation Summit—your opportunity to discover the strategies that will define the next generation of service.
Why Attend?
This summit is designed for service leaders who want to stay ahead of the competition and transform their service strategy. You’ll gain invaluable insights on the changing dynamics of the service industry and practical ways to adapt to new opportunities and threats.
What You’ll Gain:
This is your chance to connect with thought leaders, share experiences with peers, and gain actionable insights that will drive growth and competitive advantage for your service business. Don’t miss out—unlock the next generation of service models and position your business for success.