The Business of RaaS: True Alignment

Consumer psychology aside, very few farmers are buying tractors because they want tractors; they are buying tractors to do jobs on the farm. When a customer can just jump right to the job they want done and pay for what they use, everything needs to be re-evaluated from first principles.

Hypothetically (and notwithstanding hardware switching costs), let’s say John Deere’s business model relied less on upfront revenue from the sale of a tractor and more on how many acres their equipment covered. Their authorized service and dealer model — not to mention their product design — would look substantially different.

These are not farm equipment manufacturers; they are Farming as a Service providers.

For Deere, once the customer owns or otherwise takes responsibility for the equipment, most of the customer’s value is recognized and Deere is barely incentivized to aid their customers with service that works for them. Even if the customer is taking advantage of one of Deere’s myriad of financing options — and make no mistake, those options are im... See more

The biggest benefit of a Robotics as a Service model is that the incentives of service providers are fully aligned with those of their customers.