Warehouse automation services market to double by 2025
30Jun
Calling all System Integrators! In a new report on the warehouse automation service market, Interact Analysis has revealed that soaring growth in the warehouse automation equipment market is causing parallel growth in the market for service contracts – worth $4.3bn in 2020 and projected to grow to $8.7bn by 2025.
This will be a stable and lucrative market for integrators, affording higher profit margins than equipment sales. Currently, a significant number of end users carry out service and maintenance in-house or use a third party. There are also customers who consider it cost-effective to leave their machinery unserviced. Interact Analysis’s work shows that the growing complexity of equipment and rising pressure to avoid machinery downtime, will mean that integrators will significantly grow their share of the services market in the next five years.
The research shows that the potential revenue generated from offering a lifetime service contract to an automation project is roughly equivalent to the original cost of the project. So, in broad-brush terms, a whole-life service contract could double the original revenue from the sale of the machinery. Furthermore, the research shows peaks and troughs in the service cycle, with the highs coming around the 5-, 10- and 15-year marks, corresponding to times when parts are likely to require replacement, and computers and control equipment to need upgrading.
Read the full article in the July issue of PBSI
