In a new report on the warehouse automation service market, the research company interact analysis disclosed that the rapid growth of the warehouse automation equipment market is bringing parallel growth to the service contract market – worth $4.3 billion in 2020 and is expected to grow to $8.7 billion by 2025.
The research of interaction analysis predicts that by 2025, the service market of installed automation equipment in the world will have a double-digit growth year by year, and the revenue will reach US $8.7 billion. This will be a stable and profitable market for OEMs and integrators, providing a higher profit margin than equipment sales. At present, a large number of end users provide services and maintenance internally, or use third parties. Some customers believe that it is cost-effective not to repair their machines. The work of interaction analysis shows that the complexity of equipment is increasing, and the pressure to avoid machine downtime is also increasing, which means that original equipment manufacturers and integrators will greatly increase their share in the service market in the next five years.
Research shows that the potential revenue generated by providing a lifelong service contract for an automation project is roughly equivalent to the original cost of the project. Therefore, in a broad sense, a lifelong service contract can double the original income from machine sales. In addition, the research shows that the service cycle has peaks and valleys, and the peaks appear in about 5, 10 and 15 years, corresponding to the time when parts may need to be replaced and computer and control equipment need to be upgraded.
In 2020, various forms of on-site services – on-site visits for problem discovery and repair, preventive maintenance visits, and OEM deployment of full-time or part-time technicians to the site – accounted for 40% of service revenue. Upgrade service (upgrade or modification of existing system rather than replacement) accounts for 22%, and remote service, that is, customers get support through telephone hotline, accounts for 19%. This 19% figure masks the fact that the utilization rate of basic hotline service packages among end users is very high, about 80-90%. In addition, as automation solutions become more complex, field services will become more common.
Post time:
Dec-01-2021