As the entire agriculture industry incorporates and experiences the growth of these agriculture technologies into the farming cycle, it also faces the challenges associated with its adoption. One of the major restraining factors associated with the adoption is the large capital investments required for its acquisition and operation. Most of the farming communities across the world do not have a strong financial background to execute significant capital formation. Since prices for technologically advanced farm machinery are comparatively higher than that of conventional farm equipment, there is a huge gap in the availability of agriculture technology equipment and its adoption. Moreover, due to dependence on favorable seasons, a farmer is apprehensive of purchasing agriculture technology equipment with upfront costs. Consequently, there is market pressure on stakeholders of the agriculture technology industry to consider and incorporate alternate payment and business models to promote the incorporation of these technologies in today’s subscription-based economy.
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Accumulation of the above-mentioned market conditions has led to the introduction of a new business model in the agricultural industry, popularly termed agriculture technology-as-a-service (ATaaS). ATaaS is a business model that allows the customers to procure their desired agriculture technology (equipment or software) as a service under different affordable pricing models rather than acquiring them as a one-time purchase. Two of the most popular pricing models under ATaaS include the pay-per-use (PPU) and subscription models. While the PPU model provides the customers the complete freedom and responsibility of acquiring the agriculture technology as per their requirement, the subscription model asks the customers to use the agriculture technology as per the duration package set by the service providers, for instance, monthly or annually.
Apart from affordable pricing, ATaaS business models provide the growers with certain features such as easy scalability and upgradation, convenient accessibility, quick deployment, and reliable data backups. By relieving the customers of ownership of agriculture technologies through the service model, the entire responsibility of ownership of assets relies on the service providers, leading to a higher cost of operations for them. Despite these additional costs, by adopting the ATaaS model, service providers are expected to experience better customer retention and recurring revenue. A service model allows the providers to remain in direct contact with their customers continually and receive constant feedback to be able to make their services a better experience for the customers and also retain them for a longer duration.
High growth in the market is expected to be driven by the growing need to adopt agriculture technologies across the industry, conversion of capital expenditure into operational expenditure for customers, and greater customer retention for service providers. The added benefits of lower costs, scalability, integration, and accessibility associated with ATaaS are also expected to be responsible for the reported growth of the business model. Agriculture is the source of livelihood and sustenance of the economy in several regions of the world.
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Hence, the need to adopt advanced technologies in the agriculture industry has driven favorable initiatives, policies, and support shown by governments in countries such as the U.S., Canada, the U.K., Germany, France, Australia, India, and China. In emerging countries, the growth of the market is expected to be driven by rising awareness among governments and manufacturers-turned-service providers about the need to elevate farm produce while evaluating the farm expenditure of their growers. Furthermore, rising concerns over global food security and sustainability have led to extensive investments by governments across the world.
Agriculture technology companies comprise a combination of equipment manufacturers and software providers in the industry. With the introduction of agriculture technology-as-a-service, these companies have respectively adopted the service business model completely or partially, leading to two service types, i.e., equipment-as-a-service (EaaS) and software-as-a-service (SaaS).
The benefits of affordable pricing models, integration, scalability, and accessibility associated with SaaS are the major reasons behind the reported growth of this service type. Equipment-as-a-service (EaaS) has not been adopted as widely as SaaS since the existing systems and equipment have not been able to precisely predict the equipment failures leading to frequent customer dissatisfaction. The introduction of machine intelligence and Internet-of-Things (IoTs) is expected to improve predictive maintenance and boost growth for EaaS service types.
The demand for basic ingredients that fulfill their daily needs, such as food, is expected to grow manifold.
Rising demand for global food production, along with the pressure of providing a continuous supply of high-quality farm produce, has created an alarming situation for the growers across the world, who are struggling to increase production per hectare.
Furthermore, shrinking agricultural lands and scarcity of availability of natural resources raises the urgency to resolve the concern.Read Report Overview at: https://bisresearch.com/industry-report/global-agriculture-technology-service-market.htmlThe concerns and pressure on the agriculture industry, factored by the increasing demand for global food production, prompt the farmers to enhance farm profitability despite slowing yield trends in several staple crops.
As advancements in technologies across end-user industries lead to an efficient world, the agriculture industry too is gradually incorporating smart technologies on farms for profitable farming.
With the introduction of information and communication technologies and advancements therein in the past decade, the agriculture industry has witnessed a revolution.
Professionals and experts of the industry across the world are comparing this revolution with the revolution in the previous century when new farm equipment and machinery, pesticides, fertilizers, and high-yield crop breeds led to dynamic growth in crop production around the globe.As agriculture becomes a lucrative high-technology industry, professionals with new-age skill sets, companies, and investing bodies are being drawn in rapidly.
