Traction for As A Service" Financing

 

The flexibility and scalability of “as-a-service” has the potential to change the way robotic solutions are implemented at the customer level.  Deploying robotics requires far more than buying a machine and plopping it down on a factory floor.  As a result,  As A Service solutions have increased in popularity.  Below is an excerpt from an A3 article on the subject: 

“As-a-service” models are defined by a good or service being made available “as needed” (this could be monthly pricing or usage based pricing). Upfront costs are usually negligible or non-existent. Contract lengths are flexible, allowing users to take advantage of the good or service only as they need it. The business assumes the responsibility for servicing and upgrades throughout the duration of the contract. 
These models have exploded in popularity due to the instant flexibility, scalability, risk reduction, and cost-savings that they enable, particularly in this era of unprecedented uncertainty and rapidity of change.
“As-a-service” business models are rapidly gaining traction across many verticals.  According to Forrester, businesses should prepare to compete with “anything-as-a-service.”

Flexible financing programs, such as leases, have existed in the robotics industry for a long time. However, those models only relieve a portion of the complexity of a true “robotics-as-a-service” offering.

Equipment Finance Outlook

 

Equipment Finance Outlook: Tightening Credit, Fluctuating Demand, Economic Uncertainty

By: Equipment Finance Advisor Staff Writer Date: May 20, 2024 @ 07:00 AM Filed Under: Industry Insights

According to the 2024 Equipment Leasing & Finance U.S. Economic Outlook Q2 Update, released by the Equipment Leasing & Finance Foundationin April, real equipment and software investment growth is projected to be 2.2 percent in 2024. The report further states investment activity is expected to pick up in the latter half of 2024 and forecasts real GDP growth of 2.3 percent this year, an improvement over the 1.7 percent growth forecasted in the Foundation’s 2024 Economic Outlook published in December 2023. Additionally, the report indicates that business lending standards for Commercial and Industrial loans tightened in Q4 2023 with a net 15 percent of banks reporting tightening standards for loans to large- and middle-market firms, and 19 percent reporting tighter standards for loans to smaller firms.

“As-a-service” models

 

First, what are“As-a-service” models, and why are they gaining popularity?

“As-a-service” models are defined by a good or service being made available “as needed” (this could be monthly pricing or usage based pricing). Upfront costs are usually negligible or non-existent. Contract lengths are flexible, allowing users to take advantage of the good or service only as they need it. The business assumes the responsibility for servicing and upgrades throughout the duration of the contract. 

These models have exploded in popularity due to the instant flexibility, scalability, risk reduction, and cost-savings that they enable, particularly in this era of unprecedented uncertainty and rapidity of change.

“As-a-service” business models are rapidly gaining traction across many verticals. This is a well-documented trend in the software space; software-as-a-service (SaaS) is now the industry norm, and is far more common than on-premise solutions that dominated the industry in the 90s. This trend is not limited to software. According to Forrester, businesses should prepare to compete with “anything-as-a-service.”

Flexible financing programs, such as leases, have existed in the robotics industry for a long time. However, those models only relieve a portion of the complexity of a true “robotics-as-a-service” offering.

The flexibility and scalability of “as-a-service” has the potential to change the way manufacturers operate. 

So what does a complete “robotics-as-a-service” model look like? 

Manufacturers know that deploying robotics requires far more than buying a machine and plopping it down on a factory floor. Every application has a unique task to execute within a specific process. The fun (and challenging!) aspect of this specificity is the considerable amount of work that goes into application design and engineering before a robot is ever procured and deployed. It is also important to consider the hard costs of both the robotics and ancillary components like grippers and sensors.