As robotics and automation expand rapidly into industries from healthcare to warehousing to food service, recent research shows that the global robotics-as-a-service (RaaS) market is projected to grow at a CAGR of 17.4 percent through 2028 to more than $4 billion. To familiarize end users with the benefits of RaaS, Mitsubishi HC Capital America reveals key factors that businesses should consider in their decision-making about its adoption.

“The entire tech and healthcare industries are using as-a-service payment models, and close to 100 percent of software is being sold on a subscription or aaS basis,” said Brent Broussard, Senior Vice President, Tech and Specialty Markets at Mitsubishi HC Capital America. “We’re seeing that more industries are becoming increasingly comfortable with automation overall, and the ease of use of RaaS is further enhancing the value of robotics.”

The following are among Mitsubishi HC Capital America’s top factors in considering adopting RaaS:

• Cost management - According to a 2022 McKinsey study, 71 percent of survey respondents say the capital cost of robots is a primary challenge to adoption. Deploying an as-a-service payment model allows end users to take extended payment terms instead of requiring a capital investment up front.
• Outsource technical expertise – The same McKinsey study reported that 61 percent of respondents say a general lack of knowledge is a challenge to robotics deployment. With a RaaS solution, the OEM or vendor is responsible for all equipment, software, supplies and services, so customers can focus on their core business.
• Access to latest technology – RaaS eliminates the risk of obsolescence for the end user since they don’t own the equipment. It also allows use of more and better equipment than might be possible with a capital outlay.
• Ability to monetize RaaS contracts – RaaS contracts are uniquely suited for assignment financing, which allows an OEM, reseller, or vendor to receive an upfront cash payment for their customers’ as-a-service contracts. After the payment stream is assigned to the lender, the OEM, reseller, or vendor can use the cash infusion for operational or other expenses.
• Flexibility: RaaS financing allows users to scale their usage up or down based on needs, which can be particularly beneficial for businesses experiencing fluctuating demands.
• Bundling updates and support: Service providers often include maintenance, updates, parts, and customer support as part of the subscription, ensuring customers have access to the latest features and assistance when needed. This ensures access and use of critical equipment for the business and reduces downtime and lags in productivity.

Robotics companies are showing strong interest in monetizing aaS subscription contracts through commercial finance providers, according to Broussard, rather than contracting with a lease or loan product. “Our process allows us to work within the OEM or vendor’s current contract and pay them for their products and services upfront,” Broussard said. “Their sales team do not have to make any adjustments to their sales process, and customers enjoy a seamless user experience with no additional contract documents.”

The number of Mitsubishi HC Capital America’s new assignment financing programs has more than doubled since 2020, and the company had record growth in assignment financing programs in 2023.