Schindler

Schindler discovered what Otis and KONE also learned: elevator economics reward service contracts over hardware sales. Founded 1874, the company generates 70%+ of revenue from maintenance - not installations - because elevators create mission-critical infrastructure dependencies with 30+ year service relationships locked in by physics, regulation, and switching costs that approach building-replacement levels.

This business model mirrors remora-shark mutualism: Schindler installs elevators (often at low margins to win contracts), then provides decades of manufacturer-certified maintenance at pricing power protected by safety regulations requiring OEM parts and specialized technician training. Building owners face prohibitive switching costs - replacing an existing elevator requires tearing out mechanical systems integrated into building structure, disrupting operations, and meeting updated codes that may require shaft modifications.

The service model generates recession-resistant cash flows: buildings need elevator maintenance regardless of economic cycles, creating annuity-like revenues. 2023 revenues reached CHF 13.66B (ranking second globally behind Otis's $14.21B), with service contracts providing the profit stability that subsidizes competitive bidding for new installations. Recent launches like the April 2025 Schindler 5000 machine-room-less elevator for mid-rise buildings demonstrate ongoing hardware innovation, but the real value accrues from multi-decade service lock-in each installation creates.

The competitive dynamics resemble territorial species defending established ranges: once Schindler controls a building's elevators, competitors must wait for rare equipment replacement cycles (typically 20-30 years) or poach through service contracts that require reverse-engineering proprietary systems. Digital service offerings like Remote Monitoring collect performance data that further entrench customer relationships by creating information asymmetries - Schindler knows elevator health better than building owners.

With 150+ years survival and global number-two market position, Schindler exemplifies how industrial equipment companies create defensible businesses by designing infrastructure that requires ongoing specialist maintenance rather than selling standalone products. Like mycorrhizal fungi that trees cannot economically replace once established, Schindler's service relationships persist through economic cycles because the cost of switching exceeds the cost of continuing.