New robotics: shifting business models

March 27, 2019 //By Dr Khasha Ghaffarzadeh
New robotics: shifting business models
Machine makers in many established markets sell their machines directly or through dealer networks. At times, they create additional revenue streams by offering technical after-sales support.

They often hope that the installed base of their machines together with limited incompatibility with competitors' products provides some lock-in mechanism. They also seek to build-in some technology obsolescence into their product cycles. Some also provide finance, directly or jointly with a finance entity, to help potential customers overcome the barrier of the upfront cost.
Many traditional robot suppliers fit the description above. Integrators often install a robotic or automated solution and provide after-sale technical support. They make it difficult to integrate competitors' robots with their solutions and offer regular hardware and software updates.
New and emerging robotic firms however do not easily fit this bill. They are in fact challenging the established norms. This is sometimes through will and sometimes through necessity. The trend towards alternative models is evident across all sectors that new robotics seeks to impact. This includes retail, agriculture, logistics, delivery, security, cleaning, transport, and so on.

Autonomous robots can provide automated precision weeding. Robotic intelligent implements can provide precision spraying or weeding too. The upfront machine or fleet costs are often high today. The technology risk for end users are also high. Users are often afraid that expert operators and repair persons will be needed. They worry that the technology is not tried and tested, especially in an agricultural environment. They fear that the technology is likely to rapidly evolve, exposing them to serious obsolescence risks. Crucially, they require seasonal services and are accustomed to paying wages and not making significant capital investments into machines with low utilization rates.
To address these challenges many companies are positioning as a RaaS - Robotics as a Service. They essentially become weeding service providers. They operate or monitor their own machines. They charge the customer per acre, a metric with which they are likely familiar. They absorb the technology risk. Crucially, they give their robots extensive field practice and will have the chance to gather data and feedback. This is important because the design of these products and services is still in a state of flux with many further iterations anticipated.

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