RaaS: A New Pricing Model for the AGV Category

Jeff Huerta
2 minutes to read

What is RaaS?

RaaS stands for Robot-as-a-Service. Much like the familiar Software-as-a-Service (SaaS) pricing model, RaaS removes upfront costs, and rolls all fees into one monthly rate. This allows customers to realize a Return on Investment from day one.

While there are many benefits to RaaS pricing, the most important is shifting from a Capital Expenditure to an Operational Expenditure. Rather than having to gain executive-level approvals to purchase assets up-front, a monthly payment model means decision making can be made at the local level. The solution provider assumes the depreciation of the asset and the end user realizes immediate cost savings.

A New Pricing Model for the AGV Category

The RaaS pricing model emerged in the mid-2010’s to reduce heavy, up-front investment for coworking robots, namely robotic arms in industrial and manufacturing environments. Soon, small bots used for goods-to-person and person-to-goods conveyor applications adopted the RaaS model. To date, no high-capacity autonomous mobile robot or AGV has offered Robot-as-a-Service pricing, instead offering capital leases through 3rd parties.

However, with the growing demand for autonomous mobile robots (AMRs) and automated guided vehicles (AGVs), and concern about capital preservation, RaaS is beginning to show up in discussions around high-capacity self-driving materials handling equipment. Through an independent survey completed in October 2020, Modern Materials Handling found that 32% of warehouse and distribution center management say they are holding back on adopting AMRs due to lack of capital. One month later, Tom Andersson of Style Intelligence market research published his findings, citing a major trend around rising interest in the robot-as-a-service model for those in the market for autonomous pallet-moving vehicles in warehousing, manufacturing, and distribution centers.

Vecna Robotics is the first player in the high-capacity AMR and AGV space to offer the RaaS model.

A Close Cousin to MHE Leasing

Leasing equipment is common within the material handling industry, and RaaS is a close cousin. The exact definition of what is included under RaaS pricing varies by vendor. However, customers benefit from:

  • using robots from their vendor fleet,
  • no upfront costs,
  • all-inclusive pricing rolled into one monthly fee.

In 2019, ABI Research predicted growing popularity for this approach to an OpEx pricing model. This pricing model is proving to be a game changer for customers looking to bypass capital expenditures, especially through a familiar means.

Download more information about RaaS and Vecna Robotics’ approach to OpEx pricing here.