Robotics provider Seegrid Corp. is the latest company to offer its products through a Robots-as-a-Service (RaaS) model, an alternative to outright purchase or lease.
Seegrid’s primary offerings of autonomous mobile robots (AMR) used in the material handling business are its Palion Tow Tractor and Palion Pallet Truck, as well as a new product, Palion Lift AMR. They will all be available to customers through an RaaS model.
In an email to FreightWaves, Jeff Christensen, VP of product at Seegrid, laid out the difference between a lease model for securing robotics and an RaaS model.
RaaS is a subscription model, Christensen said, a package that comes with an entire suite of support services. It allows the customer to access various Seegrid AMR products as well as Fleet Central, which is the Seegrid enterprise software to manage a fleet of AMRs.
Christensen said all the services are part of the subscription, for a set term.
“RaaS customers can continue experiencing the benefits of their automation solution by renewing or upgrading their subscription to accommodate their company growth and business requirements,” Christensen said. “RaaS enables the customer to move more quickly into automation, stay up-to-date with new technology, and with less initial financial outlay and quicker returns.”
By contrast, according to Christensen, when Seegrid customers choose to lease, they finance their Seegrid purchase through a third-party vendor. The customer is responsible for ongoing maintenance and support fees, which can also be added to the lease program. Lease terms vary based on the third-party lessor. Sometimes the third party gives the customer the option to purchase the equipment outright at the end of the lease term.
Christensen said there are no plans to end the ability to lease or purchase equipment in favor of an RaaS-based sales model.
Seegrid declined to provide a cost comparison on leasing vs. purchasing vs. RaaS. However, Christensen said that “buying into mobile automation through a subscription offers a faster payback compared to upfront purchase, so customers can enjoy financial benefits sooner.”
Changes in the technology also can flow more quickly through an RaaS model, Christensen noted. “RaaS is flexible and scalable and specifically designed to empower facilities to retain their competitive edge through Seegrid automation solutions, which are rapidly expanding in capability,” he said.
A similar view of RaaS was heard last year at the FreightWaves Future of Logistics Real Estate Summit.
At that virtual summit, Locus Robotics CEO Rick Faulk said RaaS is the preferred way to put robots into action in a warehouse. “There is no upfront capital for the client,” Faulk said. “There is a setup fee of up to $100,000 depending on the size of the facility. That’s the only upfront catch.”
He also said one- to three-year contracts include all the necessary support, maintenance and software upgrades.
Christensen said he expected customers to “gravitate” toward a three-year subscription model.