Caterpillar is accelerating its digital strategy, with a focus on AI, cloud platforms, and ecommerce, as part of an initiative to grow its services revenue to $28 billion by 2026.
The company’s executives highlighted their approach during a recent virtual session with JPMorgan. It emphasized the importance of digital services as a long-term growth driver beyond the cyclical nature of equipment sales.
In 2024, Caterpillar’s services revenue reached $24 billion. That’s an increase from $22 billion in 2023 and $14 billion in 2016. Services now account for 39% of the company’s total machinery, energy and transportation (ME&T) revenue. That’s up from 36% last year and 25% in 2016. The company is on track to achieve $28 billion in services revenue by 2026.
Caterpillar’s leadership noted that, while it has made considerable progress, it still has work to do to fully realize its potential. The integration of digital technologies and AI is key to scaling initiative-taking, predictive, and personalized services across the company’s global fleet.
How Caterpillar is prioritizing digital to grow revenue
A major part of this effort is Helios, Caterpillar’s proprietary cloud platform.
Helios connects over 1.5 million machines and engines worldwide, including those from non-Caterpillar brands. The platform processes more than 50 billion data points each month and supports tools like Prioritized Service Events (PSEs). These events combine multiple data sources — such as telematics, inspections, engineering specifications, and repair history — to identify machines that are at risk of failure.
Caterpillar reports that customers using a combination of its digital tools spend up to 33% more on aftermarket services and are more likely to remain long-term customers.
Those Caterpillar digital tools include:
- VisionLink (for fleet monitoring)
- Cat Inspect (for digital inspections)
- Cat Central (a mobile app for parts and service)
The role of ecommerce is also expanding. Caterpillar’s online parts platform, in partnership with its dealer network, processes more than $15 million in sales per day. This figure has surpassed the company’s 2022 digital commerce targets and reflects growing demand from smaller contractors and fleet operators.
To better serve this customer segment, Caterpillar has focused on enhancing mobile and self-service experiences. The Cat Central app, for example, allows smaller customers — typically operating one or two machines — to monitor fuel usage, order parts, schedule service, and manage financing all from their smartphones.
Internally, Caterpillar has integrated AI into several areas, including manufacturing, logistics, and administrative workflows. It uses AI for quality inspections in factories, dealer inventory forecasting, optimizing technician dispatch, and even translating documents.
More than two-thirds of new machines and engines are sold with a Customer Value Agreement (CVA), a bundled maintenance and service plan that includes options ranging from basic kits to uptime guarantees. These agreements are a major source of recurring revenue and contribute to strengthening dealer relationships.
Although equipment sales can be influenced by economic fluctuations, Caterpillar sees its digital and services strategy to reduce market volatility and improve profit margins.
Caterpillar’s leadership emphasized that the company’s digital and services-focused approach is a strategic shift aimed at achieving high-value, high-retention service growth, with the target of reaching $28 billion in services revenue by 2026.
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