The challenge for Siemens Healthineers and their customers is that the traditional business model for medical equipment is predominantly transactional and rather CAPEX heavy. But with a growing portfolio of AI-based and dynamically evolving offerings, the model needs to be adapted. “Software-as-a-service for dynamic offerings that evolve with industry and user demands doesn’t work as a perpetual license, from a business perspective,” says Rahma Samow, Head of Siemens Healthineers Digital Health Global Sales, Marketing, and Digital Go-to-Market. “We have worked very diligently to transform many parts of our portfolio to recurring revenue models. Because if you want to leverage AI as a key technology for digitalizing healthcare, you have to flexibly adapt, scale, and transform business models as your portfolio will obviously change with dynamic healthcare demands.” Samow sums it up: “That’s the entire point of harnessing AI for the better of the patient – indefinite usage of soon-to-be outdated software doesn’t cut it anymore!” So, for their new digital products, Siemens Healthineers implemented a subscription business model where customers paid for imaging and decision support services on a monthly basis or based on usage. “This enables customers to receive continual updates, while limiting capital expenditures and giving them better planning accuracy and spending flexibility as their needs change over time,” Florian Rachny, responsible for Digital Business Processes at Siemens Healthineers explains. Continues Samow, “Several of our AI-powered or AI-enabling solutions have been transformed into suitable business models and deployment scenarios in the last years, taking into account healthcare providers’ infrastructural demands and preferences, and combining flexibility and scalability with future readiness.”

From the perspective of Siemens Healthineers, subscriptions mean new revenue streams that are more consistent over time. But, more importantly, they drive the company to focus on the customer relationship and how to provide value – on a continuously evolving journey. “To be honest, simply managing their machines from the cloud or even from an Edge solution is not seen as a huge value add by our customers. They often have self-developed solutions for that. The motivation for a hospital to move to the cloud has to come from tremendous value, which is what we provide with our AI-powered, cloud based augmented workflow solutions,” says Amardeep Singh, Siemens Healthineers Digital Health Go-to-Market for AI-Rad Companion. And this new understanding of value is reflected in their pricing. Instead of simplistic cost-plus pricing, which in a competitive global manufacturing environment is always subject to margin squeeze, Siemens Healthcare now prices based on value. “Pricing for AI-Rad Companion is built around productivity savings. How much time can we actually save the radiology team?” Singh explains.