Robotics as a Service (RaaS)

Robotics vendors are looking for new business and delivery model with which to launch their products and better reach their target market: the lease of machines and the sale of associated services are showing themselves to be flexible and adaptable solutions to address some market needs. A step further, “Robotics as a Service” (RaaS) is emerging as a business model with great potential.

SALIENTS

  • The Harvest Automation Rental Program -More customers can now access the Harvest HV-100s thanks to Harvest’s recently launched Robot Rental Program. Compared to a sale price per unit of $30,000, Harvest offers to rent out 4 robots for 3 months at $15,000. What’s more, the price of the rental can be discounted from the price of a subsequent outright purchase, should this take place.
  • Avidbots Rents out its Cleaning Robots -Avidbots offers a very wide selection of cleaning robots, which allow it to meet the needs of a all kinds of businesses. It also offers a rental service by hours, such as is suitable for micro-businesses which do not need to buy outright, and for undecided customers, who in this way can test the machines to find the solution which best suits them.
  • Savioke Butlers by the Hour -SaviOne, the robotic bellboy which currently offers its services in Cupertino’s Aloft hotel, is the first of a new generation of robot-butlers which can be rented by the hour to offer a gamut of services in spaces it shares with humans.
  • Nestlé Japan Will Rent 1,000 Pepper Robots to Sell their Coffee Machines -Pepper, the robot from the Softbank telecommunications company which is capable of recognizing emotions, has already proven to be an excellent marketing tool. The 1,000 rented robots will be located at Nestlé sales points in major department stores, where they will be able to explain Nescafé products and services to customers, as well as engage in basic conversations with them.

 

ANALYSIS

  • Speaking the Client’s Language –For burgeoning technologies, there is a historical misalignement between technology vendors and End-user customers. Years ago, the first wave of software developers often felt they were not understood by some of the users of their products, who did not appreciate (or maybe did not care about) the technological “beauty” of their software solutions. For their part, customers did not understand why programmers were offering them, over and over again, products which were merely adapted to their needs and were not responsive to suggestions they were making.

In the field of RIOS (Robotics & Intelligent Operational Systems), history seems to be repeating itself with providers creating highly sophisticated robots which might never find their niche in the marketplace, or at least will never scale. It is most often a business misalignement, the technology deployed is not to blame (the solutions work): vendors create solutions based on a market potential, but not on a market demand and, because of poor initial client engagement, don’t actually answer a basic question “who are my clients” (How are they working right now? How are they buying? How much are they currently paying to do the job? How are they consuming the services my solution can provide? How are they measuring the viability and success of what my solution can do? Et al).

  • Aligning Solutions to Market Trends -Businesses of all sizes have been opting in recent years for reducing the structural costs of their workforces (decreasing capital expenses for operational expenses) and for incorporating part-time, independent professionals within more flexible relationships based on competitiveness and results. In this scenario, selling RIOS solutions as devices and not as a service go against what organizations are trying to achieve. The introduction of robotic technology in the marketplace should take into account such current trends and provide solutions which are based on them. Flexibility, speed, adaptability, affordability, agility, and only paying for actual usage… are key concepts in contemporary markets. This is why RIOS providers need to evolve from being merely makers and suppliers of robots towards becoming service providers.
  • Robotics as a Service (RaaS) as a Business Model –The full RaaS model can be defined as below:
    • Elastic: the quantity of service delivered can evolve over time to match client’s real time demand.
    • Flexible: service delivered adapt to changing client’s situation
    • Effective: the level of usage has no (or very few) influence on the quality of service.
    • Pay per Use: it is a service model

RaaS involves being able to offer highly adaptable robotic solutions to meet the needs of different customers: from a single robot to a fleet of robots; rental or lease-purchase options; multipurpose hardware platforms which with the right software can perform a variety of tasks. In other words, providing what is needed the way it is needed and when it is needed, affordably, and with assured quality standards. If the RaaS model has obvious advantages for the customer, for the suppliers it is also a business model which allows them to grow their customer base, and to greatly increase  their company’s market share, since the company’s value is not solely in its stock of products but in the potential profitability of the additional services it offers.

  • Aligning Solution’s Value with Customer’s own Key Performance Indicators –Customers will listen more attentively to proposed robotic solutions if they can be readily compared to their current performance indicators and metrics. For example, where robots replace operations for which costs are monitored by hours or days, it makes sense to offer services which follow this same logic, instead of merely selling units. In this way the return on investment and the cost effectiveness of the RIOS solution is more easily visualized by clients.
  • Value Proposition: Cost Reduction versus Growth -Cost reduction is certainly a good argument for RIOS providers to use with a prospective client, but it is not, on its own, the kind of argument which will enhance the provider’s strategic positioning as a technology partner. To achieve this, the provider needs to deliver customized robotic solutions which have the effects of increasing the customer’s business, generating strategic innovation or opening new markets. Such solutions need to be presented and evaluated according to the existing metrics of the client company and of the specific sector in which it operates. The hotel industry can evaluate its results according to room occupancy, the logistics industry on the time it takes to deliver orders, or the retail industry on the value of the average shopping basket. The ideal strategic partner in robotics will thus be one which marries technological sophistication with the ability to empathize with the client company and help it to improve its business.

©Myria Research, 2014