The Entrance of Everything-as-a-Service Offering Model in Augmented Reality Will Disrupt the Market by Minimizing Upfront Investment and Boosting Growth

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4Q 2019 | IN-5691

Ubimax, one of the leading Augmented Reality (AR) platform providers for enterprise wearables, recently introduced a new monthly pricing option. The Everything-as-a-Service (XaaS) offering allows enterprise customers to leverage Ubimax’s Frontline solutions and selected AR devices in a monthly charge, removing the burden of upfront investment cost for its customers. The US$200 monthly fee includes the necessary hardware, software, and services (such as cloud hosting) companies need to instantly implement various AR use cases like employee remote assistance, order picking, and field maintenance in order to improve their business efficiency and reduce costs. Customers can select a device depending on which best meets their business and use case needs; RealWear HMT-1, Vuzix M400, Glass Enterprise Edition 2 and Epson BT 350 are all options.

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Ubimax Launches the First XaaS Platform in the AR Market

NEWS


Ubimax, one of the leading Augmented Reality (AR) platform providers for enterprise wearables, recently introduced a new monthly pricing option. The Everything-as-a-Service (XaaS) offering allows enterprise customers to leverage Ubimax’s Frontline solutions and selected AR devices in a monthly charge, removing the burden of upfront investment cost for its customers. The US$200 monthly fee includes the necessary hardware, software, and services (such as cloud hosting) companies need to instantly implement various AR use cases like employee remote assistance, order picking, and field maintenance in order to improve their business efficiency and reduce costs. Customers can select a device depending on which best meets their business and use case needs; RealWear HMT-1, Vuzix M400, Glass Enterprise Edition 2 and Epson BT 350 are all options.

The XaaS pricing model is able to address one of the main barriers of massive AR adoption, which is the high cost of investment, by shifting from a high Capital Expenditure (CAPEX) to predictable Operational Expenditure (OPEX). By spreading out the cost of investment, businesses are more likely to implement AR solutions.

Why the XaaS Model Will Drive AR Growth

IMPACT


Everything-as-a-Service (XaaS) is one of the most promising pricing practices in numerous content and technology markets and has already proved its value both for Business-to-Consumer (B2C) and Business-to-Business (B2B) products/services. XaaS models provide businesses with numerous opportunities for growth and generate new revenue flows for providers. At the same time, XaaS meets the criteria for successful digital transformation thanks to the agility, flexibility, and rapid implementation that it provides. It is expected that Ubimax’s initiative will result in similar offerings from other AR platform providers, which will significantly contribute to the total adoption rate of AR solutions, in terms of both the number of AR smartglass shipments and total revenues.

Thanks to an XaaS option, it is expected that more businesses will proceed to scale adoption and early trials, as AR implementation will become a less risky investment and a smoother process, which is very appealing for any business. Enterprise customers don’t need to invest in their own AR smart glass equipment, something that challenges many businesses due to its high cost, device maintenance, and the continuous technological updates of the devices. In addition, access to the latest technology and the quick scalability of AR solutions will allow business to instantly empower their employees, eliminate costs and inefficiencies, and achieve goals more quickly. An XaaS offering will also boost adoption rates in startups and small/medium companies that lack financial resources and expertise to invest in AR solutions. Moreover, thanks to the upfront cost saving and the instant implementation businesses can better estimate success metrics/KPI’s and maximize Return on Investment (ROI). Finally, XaaS provides more options for customized solutions, allowing businesses to directly target inefficiencies, use the specific services they need, and scale them as their businesses grow and mature.

Criteria for a Successful XaaS in the AR Market

RECOMMENDATIONS


XaaS solutions are able to address some of the major issues that limit growth in the AR market and benefit both providers and customers. However, shifting to a new pricing model gives rise to some challenges for the providers that require careful planning and continuous improvements.

When an AR provider shifts to an XaaS business model, it requires investment in Information Technology (IT) systems that guarantee customers’ data security and privacy, minimizing any risk or potential error. A considerable number of businesses may be reluctant to share and store data on providers’ cloud services. Another expected challenge in XaaS models is customer retention after subscription periods end. Customer experience and satisfaction are among the most important criteria; a customer-centric approach, which increases customer’s value, navigates them to solve inefficiencies and optimize operations guarantees success. Also, the range of AR devices and frequent updates and support is one of the most important differentiation features; consequently, partnerships and collaborations between manufacturers and software providers will play an important role in a competitive XaaS offering. Moreover, by including services like IoT analytics or Computer-Aided Design (CAD) support, providers are able to differentiate from their competition and offer various packages that will increase their revenue.

All in all, XaaS models are a way to drive AR growth and adoption rates and an opportunity for AR providers to enhance the quality of their services in order to remain competitive and retain/expand their customer base. Companies that will deliver XaaS options will have an advantage and will experience sales growth in the short term and ideally retain those new customers in the long term. It is expected that other companies will follow this initiative in the coming months and, ultimately, as a wider selection of operators introduce similar offerings, selection criteria for customers will rely on other differentiators from these providers.  

 

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