The rise of the robots (as a service)

Robotics as a Service (RaaS) is growing in popularity. But why now, and what industries can benefit from this model?

Robotics or robots as a service (RaaS) is a business model where customers can deploy robotic process automation (RPA) as a cloud-based service while leasing robotic devices as needed. It’s gaining prominence because it provides facilities with the ability to rapidly scale up and down as demand dictates and allows buyers to expand or experiment with robotics without going through a rigorous purchasing process.

“When using robotics to replace people, a five-year payback time can be typical, rising to ten years for some industries. This is because robots are expensive and the people they’re replacing are often not highly paid. Using RaaS to avoid the massive initial investment is clearly attractive,” notes Chris Roberts, head of industrial robotics at management consulting company Cambridge Consultants.

Furthermore, it also follows the trend of companies moving towards cloud solutions rather than investing in large hardware and maintenance projects.

Although RaaS can offer benefits to businesses of any size, it is a model particularly well suited to SMEs, which may not have the right IT resources to deploy robotics platforms.

“These organizations will gain more value from investing in RaaS as it enables them to focus on the development of the actual robotic process automation without having to deal with technical back-end issues,” notes Itay Reiner, head of product management for robotic automation company NICE Advanced Process Automation.


What’s driving RaaS?

According to analyst firm IDC, by 2021 45 percent of mobile robotic deployments will be by way of RaaS, having an organizational impact across multiple business departments.

John Santagate, research director at IDC, says the three biggest drivers currently pushing RaaS uptake are scalability, cost and flexibility.

“Scalability in that robots can be added to the network very easily in times of need to scale up production or material handling capabilities. Cost in that the model allows for the deployment of highly valuable robotic technology that usually comes with high up-front costs. Flexibility in that the model allows for robots to be added on demand,” he points out.

“The most prevalent benefits are to be seen in the huge time and cost savings that organizations are recording, yet there are other huge advantages that should be considered,” continues Colin Redbond, head of technology strategy at software firm Blue Prism.

“Firstly, customer satisfaction and therefore loyalty will be significantly boosted, given the improvements made to business processes. Secondly, employee engagement can be completely turned around. By virtue of taking the dull, repetitive tasks out of someone’s daily schedule, you give them the time to pursue more rewarding activities that bring greater value to the business.

“Instantly, you have a workforce that is far more engaged and committed to delivering the high levels of service that today’s customers demand. That is invaluable.”


Benefits for a variety of industries

Unsurprisingly, one of the industries best set to benefit from RaaS is warehousing and order fulfilment, which can help organizations automate and optimize their operations as Lorenzo Veronesi, IDC research manager highlights.

“Think about seasonal spikes in demand. Traditionally, companies would have to hire a lot of temporary labor to fill the productivity gap during these periods. With mobile robots a fulfilment center can very easily drop in additional mobile robots that will increase the productivity of existing labor, will not disrupt the workflow and can allow a firm to easily flex based on peaks in demand.”

The increased viability of deploying robotics in sectors not traditionally robotics-oriented will also raise demand for RaaS, as those without expertise in managing robotics solutions can simply outsource their robotics services.  

“There is a very interesting story in robotic security as a service as well with companies like KnightScope deploying robots on an hourly ‘salary’,” says Carla La Croce, senior research analyst at IDC. “This could open up RaaS to a whole new set of industries such as real estate, entertainment, public services etc.”

Roberts goes on to note that even the healthcare industry could take advantage of RaaS in the future.

“The market leader in robotic surgery, the Da Vinci robot, sometimes suffers from the problem that the running costs are already too great. Hospitals might get a wealthy donor to pay for the robot itself, but then can't afford to run it because the cost in disposables, surgeon training and so on is prohibitive. Even when the CAPEX is dealt with, the OPEX is a problem. New entrants such as Cambridge Medical Robotics are attempting to address this by making the robots vastly cheaper to train on and run, which does open the door to a RaaS model somewhat…”


Issues to overcome

However, there are issues to consider. For example, Roberts believes that while the ‘X as a service’ model works really well when the service is flexible and easily reconfigurable – as is the case with Software as a Service (SaaS) – any time you involve hardware it’s harder to realize the business model.

“This is because each installation will require some customization, and the turnaround time, and therefore the cost of installation, is much higher for robotics than it would be for traditional SaaS,” he says.

“Take warehouse automation, for example. While the base platform might be standard across all installations, there will need to be adaptations to the grippers or manipulators to deal with the specific items in different warehouse, which as a hardware change will undoubtedly take longer to implement than a software change would. It might be the matter of moments to switch a server from providing software to a company in Seattle to one in London, but in the RaaS model, shipping the robots around will take much longer. 

“But if you can crack that problem, of course, then you do have an excellent way of automating in areas that have traditionally been hard to get to,” he notes.