September 20

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Introduction to the new world of subscription based robotics solutions (Robots-as-a-Service)

By Mike Oitzman

September 20, 2016

RaaS, robotics

The world of buying and selling industrial equipment is rapidly evolving. The convergence of cloud-based solutions for IT infrastructure and the evolution of innovative enterprise software licensing is now spilling over into new ways of delivering manufacturing and supply chain infrastructure. The Software-as-a-Service (SaaS) paradigm in the enterprise software market has given birth to a new Robots-as-a-Service (RaaS) business model, a concept which is being adopted by many of the new robotic startups who have emerged in the past year.

The product strategy and business model requirements for RaaS are completely different from the “classic” capital equipment product design and sales model under which the industrial automation and robotics business has historically operated. The annual nature of a capital asset purchasing cycle imposes a sales cycle which can vary from anywhere from 3 to 18 months. This cycle varies depending on when the equipment sales team is able to jump into the purchasing organizations buying cycle. For the customer, building the business case for expensive, fixed asset, capital equipment often requires many layers of management approval. For the supplier, the multi-channel nature of the sales process makes it extremely difficult to control the sales process and to maintain an accurate sales funnel. The capital equipment purchasing cycle isn’t optimal for either the supplier or the customer.

Advantages

The advantages of RaaS for the customer/buyer are many:

  • Simplified return on investment (ROI) criteria
  • Elastic consumption (pay for what you use, and scale to meet production peaks/valleys)
  • Free software upgrades
  • Higher quality equipment
  • More intimate vendor support
  • Comparable consumption rates to manual labor

The advantages of RaaS for the equipment manufacturer include:

  • More predictable cash flow
  • Shortened product sales cycle
  • Better sales funnel visibility
  • Higher touch support interaction
  • More precise innovation cycles

If you are an executive or product leader considering the implementation of a subscription-based product strategy or you are in the process of creating a new Robotic Service Provider (RSP), then the latest research from the MarketSpec Group will provide you with the guidance to understand and mitigate many of the issues surrounding the successful implementation of a new RaaS-based solution and corporate strategy.

To learn more about how the product strategy of subscription based pricing and service delivery is different from the classic capital equipment sales and support model, download the latest whitepaper from The MarketSpec Group: The new world of Subscription based Robotic Solution

Stay tuned for the next article in the series where we will explore RaaS in detail from the perspective of both the vendor and the end-user.

Mike Oitzman

About the author

With twenty plus years of product management and product marketing experience, Mike has seen everything necessary to successfully launch and market a new product or service.

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