Why RaaS, Why Now?

Talk about Robotics-as-a-Service (RaaS) pricing models emerged in the early 2010’s. By 2018, the industry began to understand the benefits of RaaS more deeply. That year, Rian Whitton at ABI Research estimated that the installed base for RaaS will grow from 4,442 units in 2016 to 1.3 million in 2026, while annual revenues for RaaS providers are expected to increase from $217 million in 2016 to nearly $34 billion in 2026.

Now, with 2020 in the rearview mirror, the benefits of RaaS has become amplified. RaaS will likely see a greater surge in popularity and acceleration to the predicted timeline.

As proved in 2020, manufacturing, distribution, and warehousing organizations that adapt quickly to evolving conditions survive and thrive. Now, planning for Black Swan events has become a top consideration for global supply chain companies, as David Clear, Vecna Robotics CRO, and friends from Highjump Körber Logistics, GEODIS, and Interact Analysis discussed in October. A RaaS financing model is one way to preserve capital, adapt quickly, and remain operationally efficient for whatever comes next.

Five Ways RaaS Benefits Your Automation Goals

1. No up-front costs. For many, capital expense approvals delay the implementation of new technology, and require up-front investment which can drain savings. Moving your AMR and AGV purchase to an operational expense opens up more freedom to use discretionary funds and accelerates timelines for deployment. This ensures operational savings are kept in a rainy day fund should a new crisis emerge.
2. All-inclusive pricing. Robotics-as-a-Service factors in 100% of costs included in a traditional robotics deployment. This includes subscription to the software platform, deployment (shipping, IT integration, and facility mapping), training and support (including 24/7 US-based support), and maintenance.
3. Immediate cashflow improvement. Realize immediate ROI by changing the cost structure from a one-time up-front cost to smaller monthly fees while maintaining cash liquidity.
4. Fast implementation. Because RaaS typically requires a cloud-based IT architecture, deployment can be as fast as 4 weeks from purchase order to Go-live.
5. Easy to scale. Under a RaaS model, the AMR vendor  deploys, connects, and upgrades self-driving materials handling 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.

Additional Benefits of a Cloud-based Robotics-as-a-Service Solution

In addition, with the IT network already in place, AMR vendors can upgrade or scale down the system quickly, based on changing business needs. For example, it is easy to:

• Push software upgrades to the whole fleet of vehicles without customer intervention.
• Increase fleet size and put new vehicles to work without a long deployment process.
• Swap out old robots for new ones as new hardware becomes available.

This keeps floor space clear and preserves people hours. In addition, Robotics-as-a-Service makes it easy to adapt to changing workflows. In other words, a facility can deploy a new robot to do a new job while returning the old robot to the vendor.

RaaS for Operational Resiliency

In conclusion, a cloud-based RaaS model can provide the backbone for greater operational resilience – a necessity in today’s unpredictable industrial landscape. In addition to scaling easily, getting started quickly, and extending your workforce, RaaS is a way to create financial resilience. Use the capital saved plus the returns from up to 30% increase in operational efficiencies to invest in future automation. RaaS is an enabler for greater gains downstream.

 

Last month, we published an article talking about the history of the Robot-as-a-Service (RaaS) model, what it is, and how it’s relevant to the high-capacity AMR and AGV industry. This month, we explain the connection between the Industrial Internet of Things (IIoT) cloud-based architecture and a RaaS model.

Like a Software-as-a-Service (SaaS) model, RaaS is a cloud-based solution. For instance, in a typical RaaS deployment for our Pivotal orchestration engine, the application is released to the cloud or in secure off-site servers. Pivotal tracks the real-time status of each robot in its fleet, including truck location, task type, estimated pickup or drop off time, and traffic in its proximity. Through secure integration, the facility’s WMS or MES assigns work to the application. Then, the application uses fleet status information to dispatch the right robot to the right job. Pivotal then presents that information on an enterprise dashboard, allowing for continuous improvement.

IIoT Architecture Suited to Scalability and Expansion

In a traditional pricing model, adding robots to an existing application can require extra work. Under RaaS, it is easy to scale a fleet and expand with new AMR models with minimal intervention from your vendor, based on the changing needs of your operation. Whether you decide to use 1 or 100 robots, we install infrastructure at your facility the same way. Increase fleet size easily, without an additional lengthy deployment process. In addition, you can swap out old equipment as updated hardware becomes available, or even change truck types based on changing needs and workflows. For example, a warehouse might swap pallet jack for a counterbalanced fork truck if they discover a bottle neck at the stretch wrap machine.

Expansion to Mixed Fleets

However, the real power of Pivotal lies in its ability to expand across platforms and human agents, and from one facility to multiple facilities. A cloud-based RaaS architecture makes it easy for facilities to:

• share robots amongst facilities,
• employ mixed fleets of AMRs and AGVs from a variety of vendors, and
• assign missions to human operators.
  

  A RaaS pricing model calls for a cloud-based IT infrastructure. As a cloud-based solution, Pivotal allows for future expansion from a fleet of AMRs operating alone to mixed fleets of AMRs and AGVs from a variety of vendors communicating with people, and equipment like Smart I/O Boxes.

(Check out this white paper we wrote with SVT Robotics to see how we’re making mixed fleets possible.)

The Power of RaaS and 5G in IIoT

The RaaS model and 5G connectivity are major players in the future of IIoT. Next-generation industrial automation systems, like autonomous mobile robots, are intelligent, connected devices that rely on:

• large amounts of data and analytics
• computation-heavy, real-time processing such as 3D vision 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 OTA updates

Historically, these systems face consistent challenges. Warehouses and factories usually have on-premise IT systems and are located in remote areas without access to high-speed internet. As a result, these facilities typically have limited WiFi bandwidth and strict security policies. 4G signals often do not provide reliable connection inside plants and lack enough bandwidth for data-hungry processing like real-time vision.

5G provides a standard, secure, reliable wireless infrastructure for next-gen automation and Industrial Internet of Things applications. Vecna Robotics has partnered with Verizon 5G Studios and Newlab to demonstrate a streamlined cloud-based architecture and deploy systems more rapidly. RaaS inherently sets up industrial infrastructure for the fastest, most reliable, most current, and most secure installation possible.

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

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 Capital Expenditure to 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-2010s 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 a 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 of 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 familiar means.

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