An Automation Tipping Point? The Rise of ‘Robotics as a Service’

“Robotics-as-a-service (RaaS) is about to eat the world of work” argues Hooman Radfar, a partner at the startup studio Expa who’s been “actively investing in and looking for new companies” catalyzing the change.”
Companies buy massive robots and software solutions that are customized — at great cost — to their specific needs. The massive conglomerates that sell these robots have dominated the field for decades, but that is about to change. One major factor driving this change is how dramatically globalization has reduced hardware production costs and capabilities. At the same time, cheap and powerful computing and cloud infrastructure are now also readily available and easy to spin up. As a result, vertical-specific, robotic-powered, solutions can today be offered as variable cost services versus being sold at a fixed cost. Just as cable companies include the costs of set-top boxes in their monthly bill, robots and their associated software will be bundled together and sold in a subscription package. This change to the robotics business model will have profound implications, radically transforming markets and at the same time changing the future of work.

With a new variable cost model in place as a result of subscription packages, it’s simple to calculate when a market is about to tip to favor RaaS. A market has hit its automation tipping point when an RaaS solution is introduced with a unit cost that is less than or equal to the unit cost for humans-in-the-loop to conduct the same task… One market that has already reached its automation tipping point is the enterprise building security market… Crop dusting ($70 billion), industrial cleaning ($78 billion), warehouse management ($21 billion), and many more service markets are tipping. When these sectors hit their automation tipping point, we will see the same level of industry disruption currently taking place in the building security market.

The changes taking place in the enterprise will also deeply impact consumer markets, and ultimately society, in profound and potentially challenging ways. We are at the start of a massive shift in how work gets done.
One study predicted the worldwide RaaSS market would be $34.7 within three years, according to the article, which also explores how the building security market is already being disrupted. “Instead of manning a building with three to four people, you can have one human managing a few remote robots” — at a cost that’s 30% cheaper.

“Moreover, all the data and insights collected via these robots is organized and made available for building and security optimization. It isn’t just cheaper, it’s better. There’s no turning back — this market has hit its automation tipping point.”

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