Robots-As-A-Service Lowers Automation Adoption Barriers, Creates New Opportunities

Here, one of Aethon's TUG robots is shown delivering food in a medical facility.

Robots-as-a-Service (RaaS) is a flexible and affordable way for companies to deploy automation and related services such as engineering, maintenance, and remote monitoring.

Often used interchangeably with Robotics-as-a-Service, RaaS comes in two main flavors. In its original meaning, RaaS refers to services where customers can get everything they need from hardware, engineering and maintenance in one package, explains Peter Seiff, CEO at Aethon, a major player in service and material handling robots for the hospital and hospitality sectors.

“Aethon’s philosophy has always been to be a vertically integrated company. So, we do our own engineering and design. We manufacture robots. We sell the robots. On the customer side, we install the robots, we maintain the robots, and we provide a 24/7 remote monitoring service to make sure that the robots are always performing as they should be.”

However, over time, a newer understanding of RaaS model has emerged and come to dominate the conversation.

“The flavor more associated with RaaS today is charging per unit of work rather than per robot. Instead of charging for the hardware and software as a product itself you pay for the service it is delivering. Aethon offers both,” says Seiff.     

Paying per item of work speeds return on investment (ROI) and reduces total cost of ownership (TCO) for the deployment compared to traditional ways of purchasing and implementing industrial automation.

The two flavors are not mutually exclusive: Today’s RaaS offerings typically include all the engineering and monitoring services and the option to pay per item of work performed. As Seiff puts it: “RaaS is more than a pricing model.”

RaaS is on the rise. The experts at market analysts ABI Research predict that there will be 1.3 million installations of RaaS by 2026 generating $34 billion in revenue. Meanwhile, a 2021 report from market analysts Technavio predicts that the RaaS market will grow by USD 832.77 million between 2020 and 2024, at a CAGR of 17%.

Lowering barriers
Adding robotics automation to a facility was traditionally thought to be only for the “big guys” due to the capital expense costs involved, says Rick Faulk, CEO at Locus Robotics, a leading developer of autonomous mobile robots (AMRs) for warehouse and logistics applications.

By shifting capital expenses for automation to operational or labor expenses, RaaS allows companies to optimize productivity with their existing labor force. Shown here, AMRs from Locus Robotics deployed in a DHL facility.  Image Credit: inVia

“The RaaS model significantly reduces the typically high operational costs and technology barriers usually associated with conventional automation solutions that often can take years to deploy. There’s no hidden capital-intensive expenses or expensive maintenance contracts, and you’ll always have the latest software updates and hardware support built in,” explains Faulk. 

RaaS effectively “democratizes robotics automation” by lowering the cost of entry and bringing cutting-edge robotics technology into all sizes of warehouses, Faulk adds.    

Advanced warehouse automation was once for “the 1% of large companies,” says Kristen Moore CMO inVia Robotics, a leading warehouse automation company that has provided RaaS services since launch and provides remote monitoring services as well as engineering and maintenance.

WEBINAR: MAY 6

The Age of Cognitive Robots: How Do We Get There?

We knew it was coming, the next generation – smart robots. What is the difference between artificial cognition and artificial intelligence? Is it just a natural progression of our collaboration with the machines? We have already jumped into the world of humanoid bi-pedals and our robots are recognizing our patterns of behavior, learning, and imitating our behaviors. What does it mean and where are we headed?

Register Free

Not just for SMEs

Despite its barrier lowering effects, it’s a mistake to think of RaaS as being for SMEs-only. Labor and cost-control challenges are universal, whether you’re a small, medium, or large operation, explains  Faulk.

“RaaS allows all sizes of operators to gain much needed control over costs, realize a fast ROI, and respond to growing demand, while optimizing their existing labor force – today and into the future.”

Larger companies want to avoid large capex for automation, but added services such as 24/7 remote monitoring are also important because it reduces costs and downtimes, adds inVia’s Moore.

It’s a little different in the hospital and hospitality sectors, where the end-user may not be as familiar with automation as their industrial sector counterparts, explains Aethon’s Seiff. Aethon is used to deploying fleets of 25-50 of its TUG service robots at a time, but interest in pay-per-unit-of-work models is primarily being driven by small hotels that are interested in deploying just one or two robots.

“Our customers don’t know RaaS by name. But they do know that they don’t want upfront costs and capital. So, they ask ‘Is there any way we can do this without upfront costs?’ Or ‘How do I know that I’m getting too many or two few robots?’ This group of customers wants to avoid both overpaying and under-resourcing. They don’t ask for RaaS by name, but by its characteristics.”

Time savings

An operator in inVia Robotics’ operations center monitors a robot fleet using a real-time simulation of the customer facility. Today’s RaaS offerings include remote monitoring and other services to ensure optimum robot performance.

Speed of deployment is a major attraction of RaaS solutions. With the RaaS provider supplying all the equipment engineering and maintenance, companies can deploy automation even if they have no in-house expertise. Moreover, fast deployments have a significant impact on ROI.

“With traditional automation, you went in and brought these monumental structures into your warehouse. They took at least a year to 18 months to build out,” says inVia’s Moore. “With RaaS you can see start to see ROI in weeks, because basically it’s a matter of getting your people ramped up and used to having robots in the facility. The moment the system starts meeting productivity SLAs, you’re already seeing an ROI and that can happen within a matter of weeks.”   

RaaS provides the flexibility companies need to quickly and cost-effectively adapt to changing fulfillment models, product mixes, and workflows, explains Locus Robotics’ Faulk. 

“In addition, RaaS enables operators to seamlessly scale their bot fleet up and down to meet spikes in demand and to quickly respond to ever-changing market needs, without hiring additional, and often difficult to find, labor. This has become especially critical  because of the restrictions and challenges posed by the pandemic and related supply chain shortages.”

Leading edge guarantee

Since RaaS providers make sure to update their robots regularly, companies that use RaaS can rest assured that they are on the right position on the technology curve.

“We are constantly improving and updating the technology, so the RaaS model relieves worries around obsolescence. If you bought an entire system today and self-manage it, there’s nothing to prevent a new system coming along in 6 months, leaving you behind the curve. RaaS enables customers to keep up with the technology curve without having to worry about where the curve is going and where you need to be on it,” says Moore.   

The future

RaaS is “without a doubt” the future of automation, says Locus Robotics’ Faulk. “The combination of exploding volumes and limited availability of labor means that operators are struggling to meet demand while controlling operational costs. With RaaS’s flexibility to scale as needs change, operators now have the ability to gain control over their business and deliver high productivity and throughput today and into the future.”