Revolution in Robotics through Robots-as-a-Service (RaaS)

Abstract

Introduction

Today’s business world is actively introducing and adopting “as-a-service” functions, such as Software-as-a-Service (SaaS), Machine-as-a-Service (MaaS), Platform-as-a-Service (PaaS), Infrastructure-as-a-Service (IaaS). In the past few years, the robotics industry, too, has developed a Robots-as-a-Service (RaaS) business model, which is increasingly popular across industries.

Traditional industrial robots were always involved in conventional jobs of parts assembly in the manufacturing and automobile industries. Today, with the increasing prevalence of robotic applications across healthcare and surgery, defense households, retail, among others, robots are gaining great acceptance owing to their efficiencies. With increasing technology use in the fields of cloud, data analytics, edge computing, IoT, and artificial intelligence (AI), robots are becoming more reliable for business applications. So, RaaS provides an opportunity to access this technology by lowering the entry barrier across business types.

What is Robots-as-a-Service (RaaS)?

RaaS is a new business model that uses an amalgamation of technologies like robotics, cloud computing, AI, and shared services. This offers end-users the benefits of robotic process automation (RPA) with a leased robotic unit and cloud-based subscription services. As a result, end-users avoid spending money on purchasing high-priced robotic units and maintenance issues. Traditionally, robots were used to perform jobs characterized as lower-paying, repetitive, hazardous, and the like; however, purchasing such robots is expensive, and it takes years for companies to realize ROI. Such high upfront costs have kept away many SMEs and MSMEs from investing in robots. Today RaaS brings opportunities for end-users by offering flexibility, scalability, and lower cost of entry.

How does the Robots-as-a-Service (RaaS) business model work?

The present business environment has changed extensively with a rise in globalization. This trend has resulted in less expensive hardware production and capabilities. Also, with cloud infrastructure and computing services, end-users can obtain more efficient outputs from robot-based investments.

RaaS is usually offered to end-users in two modes as follows:

• Robotics as a cloud service: Industries such as retail and warehousing employ robots that access cloud and shared services. Such robotic systems enable companies to gather product and customer data and store them on a cloud-based shared network. Data is accessed and shared across the end-users as per requirements, thereby enhancing functionality and eliminating errors.
• Robots on Rent: It is often not feasible for many businesses to integrate a robot with their current technology. So, a RaaS model provides a solution for such end-users by providing rental robots and access to shared services. Such a model offers great flexibility to end-users.

What are RaaS’ advantages?

The RaaS business model brings benefits to both end-users and service providers. Examples include:

Major elements of a commercial version of RaaS:

• Value-Based Pricing – Companies that sell the RaaS concept eliminate the biggest limitation for any business, the capex budgeting and approval process. RaaS helps buyers eliminate big capital purchase decisions and the associated maintenance expenses; instead, customers can immediately implement and realize value.
• Continuous Development Cycles – For RaaS providers, a major advantage lies in delivering product upgrades quickly and efficiently. This benefits the vendors by enabling them to stay ahead of the competition. For example, if a robotics company launches a new vision inspection functionality, it can be easily passed on to customers under the RaaS program instead of making them wait for the next product cycle.
• Information Network Advantage – This RaaS model is expected to deliver more information advantages that scale with presence and time in the market by collecting and analyzing data from multiple users. As a result, the service provider can give greater value to their customer base by optimizing time, repairs, replacing algorithms, among other things.
• Reducing Total Cost – For companies offering the RaaS business model to their customers, every cost that the companies strip from their system is shared across the organization until competitors venture in the same and pricing catches up. Yet, this is considered as a much better system where RaaS companies are the best owners. Also, since lost customers usually do not prefer to own a robotic fleet and spend on capex and opex activities, RaaS companies gain more advantages with their business model as they dodge huge investment requirements and implement cost-effective solutions.
• Better Customer Service: The traditional business model of developing, buying, installing, and running a robot system creates a division between multiple business segments ranging from developers and sales teams to distributors. However, with the RaaS model, customers and development teams work closely to resolve problems, which creates a closer connection between builder and user.
• Access to Premium and High-Skilled Talent: It is extremely difficult to build a proper functioning robotic system in complex environments. Especially for the integration of hardware, software, and customer relations, implementation is often challenging. Furthermore, with greater competition and faster product cycles, it becomes imperative for any company to have a highly skilled team. Hence, RaaS companies consistently focus on employing and training a skilled talent pool that can execute complex robotic projects, especially since any shortfall could lead to the company’s downfall.

Examples of RaaS Business Model in Use:

Will RaaS Benefit Your Organization?

Currently, the RaaS business model is at a nascent stage. Although one cannot deny that RaaS is growing across warehouse and manufacturing sectors, an organization must evaluate the cost-effectiveness of this solution for its line of business. RaaS offers many benefits: low-cost entry, flexibility, among others; the user knows that it can pay for the robot on a per-use basis and return it when it is no longer required. Yet, many manufacturers must still weigh multiple business requirements before their short-term and long-term investment goals are realized through RaaS.

For any company to implement the RaaS business model, it is necessary to evaluate their existing legacy equipment for ROI, Total Cost of Ownership (TCO), and associated maintenance costs; to analyze if the proposed RaaS model can actually decrease obstacles and costs. RaaS may not be suitable for all organizations and all applications. Companies must have immediate access to highly skilled professionals as well, and this enables the resolution of many complex robotic installation and integration tasks.

Conclusion:

RaaS offers multiple benefits to both customers and robotics companies. The industries most rapidly adopting RaaS are manufacturing and healthcare. It is anticipated that other industries such as retail, logistics, agriculture, and electronics will also increase the adoption of the RaaS model in the near future. Such growth drivers are attributed to the rising cost of labor, the declining price of robotic systems, and a dearth of skilled professionals.

RaaS is able to disrupt the value chain by eliminating third parties, creating a direct link between the customer and the robotics manufacturer, who is also the service provider. This model benefits customers by initial capex cost savings and eliminating costs associated with multiple vendors ranging from system integrators to OEMs. For robotics vendors, this model establishes new revenue streams by adding value-added services.