Launching a Product-as-a-Service (PaaS) model is already a bold move. Scaling it is where most companies stumble. From getting internal buy-in to enabling indirect sales channels, the journey is full of hidden traps.
At Black Winch, we’ve supported 50+ manufacturers and heard firsthand from industry leaders in our PaaS Champions podcast and webinars, and we see the same five challenges again and again.
Here’s what they are and how to overcome them.
1. Internal selling: Winning over your own teams
The challenge: The hardest sale you’ll ever make is not to your customers, it’s to your colleagues. Finance worries about risk. Sales fears losing commission. Service teams wonder about added complexity. As one of our webinar guests put it: “If you don’t align incentives internally, you’ll never align customers externally.”
Example: In our Product As-A-Service Champions podcast, Yann Carré, Leader of circular business models at Decathlon, described the cultural shock of shifting from being a product giant to offering services. Internally, many saw the new model as a disturbance to a well-oiled machine. He stressed the need to move step by step, proving value gradually with pilot sports and geographies before securing wider buy-in.
📊 Stat to know: According to Zuora’s Subscription Economy Index, companies running recurring models grow revenues 3.7x faster than the S&P 500 average. Showing that kind of data to finance and sales teams helps build the internal business case.
Quick fix: Build a strong internal business case around KPIs that matter. Show your finance team the predictable recurring revenue, show sales how commissions can be redesigned, and show service how uptime translates into loyalty.
2. Channel enablement: Cracking the indirect sales code
The challenge: Scaling PaaS through indirect sales is a completely different game. Traditional distributors are used to one-off product sales. Asking them to sell outcomes, subscriptions, or uptime requires a mental (and financial) shift.
In many industries, resellers default to pushing funders or service providers they already know, which dilutes brand impact and slows adoption. Compounding this, complex quote-to-cash processes, lack of automation, and high turnover among reseller salespeople make recurring models difficult to adopt. Without simple tools, clear roles, and unified offers that combine equipment, services, and software into one outcome-based solution, indirect sales channels struggle to engage.
Example: In our discussions with telecom providers and tech companies, like Alcatel Lucent Enterprise, the difficulty was exactly this: enabling indirect sales to handle recurring models. They had to redesign their quote-to-cash processes and introduce tools so channel partners could manage subscriptions without friction.
📊 Stat to know: Forrester research shows that in B2B tech, 70% of revenue flows through indirect channels. If partners aren’t enabled, PaaS penetration simply won’t scale.
Quick fix: Don’t just “train” the channel, equip them. That means creating a clear blueprint for partner activation, introducing subscription-ready billing systems and APIs for fast quoting, and aligning incentives with shared KPIs that make recurring revenue attractive.
To tackle this exact challenge, Black Winch offers ComPaaS, the world’s exclusive AI sales assistant for Product-as-a-Service. ComPaaS helps manufacturers and their channel partners automate their refresh strategy to retain subscribers, turn buyers into renters, boost channel penetration, and equip resellers with the clarity and confidence to scale PaaS offers.
3. Customer education: Selling usership over ownership
The challenge: Customers often hesitate. Why subscribe when they are used to buying? Why pay monthly when they’re used to capex? This adoption curve slows scale.
Example: David Mackerness, Director at Kaer (Cooling-as-a-Service), explained in our podcast that customers didn’t care about air-conditioning systems, they cared about business outcomes like comfort and efficiency. “We loved air conditioning, but they didn’t. They just wanted cooling.” The shift only worked when Kaer sold cooling as an outcome, not equipment.
📊 Stat to know: The global Equipment-as-a-Service market, valued at around $2.2 billion in 2024, is projected to surge to nearly $22.9 billion by 2030, an impressive CAGR of 47.3% Customers are starting to embrace usership, but they need help getting there.
Quick fix: Reframe the value proposition around outcomes and simplicity. Instead of selling “a product plus services,” position the offer as a single, worry-free solution that delivers comfort, uptime, or productivity. The more friction you remove, whether in payments, maintenance, or performance guarantees, the easier it is for customers to adopt PaaS models.
4. Operational complexity: Beyond pilots
The challenge: Pilots are easy. Scaling across geographies, product lines, and customer segments is where complexity explodes: billing, lifecycle tracking, service contracts, returns, financing…
In a conversation with Daniel Cho, Head of Strategic Pricing at Philips Healthcare, he highlighted the danger of rushing automation: “The worst part is if you have a terrible process and you automate that terrible process, you will just live with that for the rest of your life.” His team focused first on invoicing and collections: the areas that drain the most energy and carry the biggest risks. A single wrong invoice, he explained, can trigger disputes, churn, or even litigation.
📊 Stat to know: A Forrester study shows that 25% of tasks companies attempt to automate fail because of no overall vision or strategy.
Quick fix: Start with the process that matters most for customer trust (usually invoicing and collections). Once that’s bulletproof, scale automation step by step.
5. Financial modeling: Convincing stakeholders with numbers
The challenge: CFOs often see PaaS as a cash flow nightmare: delayed revenue recognition, higher upfront costs, perceived risk.
Example: E-Lin Tan, Global Head of BlueMovement at BSH, described the tension clearly: “It’s very heavy on capex and therefore the cash flow is not sexy at all until you have the critical mass.” To bridge that gap, her team explored partnering with financial institutions. By using operational leasing, they could receive the full contract value on day one while still delivering recurring services to customers.
Similarly, Dominiek Plancke, CEO of ETAP Lighting, said that they created financing programs with their bank to simplify multi-country scaling.
📊 Stat to know: Analysis of 20 years of data by Zuora and Thematics Asset Management shows that Opex spending is positively correlated with inflation meaning recurring models are more resilient in downturns.(lien?)
Quick fix: Hybrid financing models - combining internal funds with external leasing partners - can make cash flows “sexier” early on, creating breathing room to scale while keeping recurring revenue streams intact.
To PaaS or not to PaaS?
The answer is yes. But scaling it takes more than vision, it takes structure, alignment, and the right partners.
At Black Winch, our mission is simple: to help you scale faster, smarter, and further than you thought possible.
