Digital apps & subscriptions: a must for the industrial sector

What has long been the norm in consumer-facing sectors is now making its way into the industrial sector: digital apps and services. 

While manufacturers once focused on machines and hardware, they are now turning to digital solutions - developing bespoke applications or leveraging existing ones - to set themselves apart, unlock recurring revenue streams, increase customer value and loyalty, and improve resilience.

However, success in the industrial sector goes beyond launching an app, it requires integrating innovative digital business models with resilient business strategies

Despite the potential, most industrial players are still struggling to turn a profit from their digitalisation efforts, weighed down by unsustainable development and operating expenses. So why should machinery and equipment manufacturers still embark on the ‘digital apps and services’ journey?

Why develop digital apps in the industrial sector?

Industrial apps are proving to be more than just nice-to-have add-ons. They deliver tangible benefits to both manufacturers and customers:

• Data-driven optimisation: Collect insights to improve machine performance and accelerate tailored innovation.
• Stronger customer relationships: Leverage information about machine use to enable customer-focused and personalised services that enhance loyalty.
• New monetisation models: Offer functions on-demand or via pay-per-use models, making premium features more accessible and profitable, and your products more attractive.
• Aftermarket revenue: Transform one-time purchases into a long-term subscription business, making your company more customer-friendly and resilient.

To illustrate this, take the automotive sector. Features like heated seats can be pre-installed but only unlocked for a fee, while Volkswagen’s pay-per-use autopilot function lets drivers skip hefty upfront costs. These flexible pricing strategies drive long-term value and boost customer loyalty. The same approach applies in the industrial sector, where digital apps can unlock powerful new income streams and deepen relationships.

Common pitfalls: where industrial apps fall short

While the opportunities are significant, many industrial companies face challenges in launching digital services. To succeed, they must ask themselves three key questions:

WHY: Mismatch between architecture and use case 

The right software architecture is critical for long-term success. It must align with business goals, while balancing extensibility, to accommodate future features and maintainability to keep costs low. Equally important is the User Interface (UI), the touchpoint between people and technology. A thoughtfully designed UI, featuring intuitive interactions, 3D visuals, and voice or gesture controls, elevates the user experience and unlocks new value. When technology aligns with application design, you get a scalable solution that grows and adapts alongside your business.

WHO: Sales is not subscription-ready

Digital apps and services require a new sales approach. Many companies launch without preparing their sales team for the shift to subscription models, forgetting that strategies should evolve alongside products. A sales strategy that adapts to the digital service offering is key to success and impacts your route to market, costs, and revenue potential.

WHAT: Lack of clear customer value 

Unfortunately, we often see that digital services solve internal problems, or simply serve as a nice add-on, instead of addressing customer needs. True monetisation occurs when digital features deliver a benefit that users are willing to pay for. Before development, be sure to clearly define the benefits for both customers and your business, set a clear pricing strategy, and ensure the service generates ongoing revenue to cover costs.

Winning use cases and business models

To succeed with digital apps in the industrial sector, manufacturers must reevaluate how they generate revenue. As they transform into hybrid software-hardware providers, embracing new business models becomes essential. Successful approaches link app development directly to monetisation strategies, such as:

• Freemium services: Basic features are free, with premium tools like predictive maintenance platforms available via subscription.
• Pay-per-X billing: Customers pay only for what they use (Pay-per-Use) or for the outcome that they can create (Pay-per-Outcome), making advanced features more affordable and flexible.
• Modular upgrades: Core functions are offered by default, with optional features like remote monitoring and asset tracking activated via an app.
• Service bundles: Hardware is sold together with digital services that enhance efficiency and add value.

These models not only create recurring revenue but also lower entry barriers, allowing customers to pay for only what they need. The result? Stronger adoption, broader reach, and long-term commercial sustainability.

Co-innovation & monetisation: The backbone of success

Successful monetisation of digital services requires more than just a good idea. It demands the right tools and execution. Often, that means co-innovation with the right partner. For example, the Monetisation Canvas developed by the VDMA offers guidance for industrial companies on creating successful solutions and unlocking revenue by shifting from cost-based to value-based pricing. From day one, it aligns technology, customer needs, and business goals, guiding critical pricing, infrastructure, and delivery decisions. With its structured, hypothesis-driven approach, the Canvas helps evaluate digital business ideas from internal and customer perspectives, ensuring they deliver real value and long-term profitability.

Here at Zühlke, we typically use the Canvas during interactive workshops with product or project teams who are unsure how to go about evaluating ideas for digital or hybrid services and other offerings. In our experience, most product teams lack experience launching digital services. That’s where co-innovation adds real value. Partnering with experienced experts and collaborating closely with customers accelerates idea validation, business model testing, and feature refinement, reducing risk and increasing chances of real-world success.

Industrial companies that are ready to link digital apps with subscription-based models are well-positioned to lead, but success requires a shift in mindset, organisation, and execution. Whether you’re just starting out or scaling up, we help manufacturers build, monetise, and grow digital services for lasting impact.

If you have questions on digital services in manufacturing or on using the VDMA monetisation canvas, we’d love to hear from you!