August 13, 2021
By Jeff Huerta, Vecna Robotics
The robots-as-a-service (RaaS) pricing model reduces the heavy, upfront investment for co-working robots. Traditional business models required a warehouse to make a cost-intensive capital expenditure for robot hardware upfront. RaaS, on the other hand, enables companies to switch to a monthly payment and realize a return on investment on day one.
The new model became popular in the mid-2010s when industrial and manufacturing organizations began leveraging robotic arms on an as-a-service basis. Soon, small robots used for goods-to-person and person-to-goods conveyor applications adopted the model. After that? RaaS began to take off.
The growing demand for autonomous mobile robots (AMRs) and automated guided vehicles (AGVs) combined with concern about capital preservation is driving RaaS into discussions around high-capacity self-driving materials handling equipment. Style Intelligence even included this trend in its market research, citing major interest for RaaS with autonomous pallet-moving vehicles in warehousing, manufacturing, and distribution centers.
Boosting warehouse goals
As RaaS grows in popularity, it is essential to understand that this business model is more than just upfront savings. Benefits driving RaaS and warehouse goals forward include:
- All-inclusive pricing: RaaS factors in 100% of costs in a traditional robotics deployment. This includes subscription to the software platform, deployment (shipping, IT integration, and facility mapping), training, support, and maintenance.
- Fast implementation: Because RaaS typically requires a cloud-based IT architecture, deployment can be as fast as four weeks from purchase order to go live, compared to months.
- Easy to scale: Under a RaaS model, the robot vendor deploys, connects, and upgrades self-driving equipment via cloud-based IT networking. This way, organizations can rapidly spool up production, reduce the upfront installation costs, and adjust workflows, routes, and fleet sizing on the fly.
- Labor support: With record shortages of workers in every industry, RaaS provides a flexible solution for warehouses to meet support needs. Warehouses can scale fleets to meet the demand of dangerous, dirty and repetitive tasks so existing and future human workers can focus on higher-level tasks.
- Latest technology: Because organizations are not purchasing robot hardware outright, they can swap out old robots as new hardware becomes available.
RaaS, 5G and IIoT
In addition, the RaaS ideology is also integral in furthering trends such as 5G and the Industrial Internet of Things (IIoT).
The RaaS model and 5G connectivity are major players in the future of IIoT. Next-generation industrial automation systems, like AMRs, are intelligent, connected devices that rely on:
- Large amounts of data and analytics;
- Computation-heavy, real-time processing such as 3D perception, simulation, dynamic optimization, and machine learning;
- Persistent wireless connectivity and M2M communication between large amounts of devices;
- Software-driven devices that consistently improve via over-the-air (OTA) updates.
Historically, these systems faced consistent challenges because warehouses and factories relied on on-premise IT systems located in remote areas without access to high-speed internet. As a result, these facilities typically had limited Wi-Fi bandwidth and strict security policies. Additionally, 4G signals often did not provide reliable connection inside plants, and lacked bandwidth for data-hungry processing such as real-time vision.
5G technologies provide a standard, secure, reliable wireless infrastructure for next-generation automation and IIoT applications. RaaS pairs perfectly with these trends, and inherently sets up industrial infrastructure for the fastest, most reliable, current, and secure installation of robots possible. The warehouse of the future is digitized, connected and intelligent – and RaaS plays a big part in supporting that vision.
ABI Research estimated that RaaS would grow from nearly 4,500 install base units and $217 million in revenue during 2016 to 1.3 million units and nearly $34 billion in revenue by 2026. These numbers are only going to increase after robots proved to be incredibly valuable to warehouse operations during the unpredictable year of 2020.
Smart organizations should consider the innovative pricing model of RaaS today – not only to save money, but increase flexibility, drive throughput, and better prepare for the only constant we can depend on – change.
About the author: Jeff Huerta (pictured, right) is the senior vice president of sales at Vecna Robotics, an autonomous mobile robot and workflow orchestration company. Huerta brings more than 15 years of automation leadership experience to Vecna Robotics, with a strong track record of building world-class sales operations. Prior to joining Vecna Robotics, Huerta was vice president of North America sales at Balyo, where he led the go-to-market strategy for the company’s self-guided trucks.