IRRaaS (IRRigation as a Service) – new business model concept
Project purpose and goal
Global warming, climate change makes water scarcity the hottest topic today. What many people don’t know, is that agricultural and farming sector responsible for 70% of the freshwater withdrawals in the world and that’s exactly where the most of the waste happens.
Water usage for irrigation can be reduced by 50% using precision irrigation already now. But not many customers can afford such solutions due to a lack of financial resources, especially at the beginning of the new season.
IRRIOT has already developed Wireless Precision Irrigation Platform, which is much more affordable than any current wire-based solution on the market. But in order to make a global impact we need to make it even more attractive for any customer.
In the project, we want to validate, verify and develop a unique business model – IRRigation as a Service (IRRaaS) based on SaaS (Software as a Service) model.
Several years of close collaboration with growers have given us a valuable insight into the growers’ situation. When it comes to the economic aspect for growers, it is very unique and difficult to predict as both the harvest and the market value of the crops vary from year to year. In addition, the growers’ biggest income comes at the end of the season and they need to invest in the new technology at the beginning of the new season and that’s where they usually lack financial resources.
IRRIOT is a wireless platform for automating irrigation for growers of any kind. With our hardware and software platform, growers save up to 50% of water consumption, increase crop yields by 30% and tremendously reduce workload.
Despite the fact that IRRIOT costs ⅓ of the wire-based competitors, it is a sensitive investment for growers who suffer from a lack of liquidity for much of the year. The result is a fear of new investments by growers and a slower growth for IRRIOT.
Now we want to lower the entry barriers for our customers even more by testing a new business model, where customers are offered a service rather than a product. The service means that we lease out our platform (software and hardware) through a subscription service and thus eliminate the one-time investment for customers.
For IRRIOT, this means large gains in the long run through recurring subscription income. The challenges we see are low initial incomes, reworking into a flexible and scalable cloud-based payment system and the reworking of our agreements with current resellers.
Current and potential customers
During the project we were able to identify the needs of customers for the new and unique concept for Precision Irrigation Automation – IRRaaS (IRRigation as a Service). We’ve conducted over 20 online interviews and 5 physical meetings with our current and potential customers in Sweden as well as globally. 80% of the customers agreed that IRRaaS will be the best and most feasible option. As a result we’ve developed the first prototype of IRRaaS. When fully developed, our customers will be able to have a choice of different payment plans and subscription options. It will significantly lower the entry barrier for potential customers in order to be able to have Irrigation Automation installed and ready to save global water and human resources. During several years on the market, we have identified three major market segments:
- Agriculture (growers of the fruits and vegetables)
- Parks and public areas
- Plant nurseries
All of those segments have different setups and needs when it comes to irrigation and fertilisation.
When we identified all the need for different customers, for IRRaaS concept we have developed user-flows for each segment.
All market segments user-flow diagram:
Agriculture (growers of the fruits and vegetables) diagram:
Parks and public areas diagram:
Plant nurseries diagram:
Prototyping the web interface for the future IRRaaS service.
In order to satisfy the needs of above mentioned market segments, we need to develop an easy to use user-friendly web interface. Using the diagrams we’ve developed web interface frames and samples:
After prototyping the semi-functional Irrigation Automation Calculator was developed. Please click the button below. For the best experience, please use your desktop browser and full screen.
During the project we have conducted over 20 online interviews and 4 physical meetings with our current and potential customers in Sweden as well as globally. 80% of the customers agreed that IRRaaS will be the best and most feasible option.
PDF version of the customer visit report can be found here – (IRRaaS) Kundbesök Rapport (Swedish only)
Project results and conclusions
IRRIOT has developed the prototype for the new business model – IRRaaS (IRRigation as a Service) – a simple monthly subscription-based model which will significantly lower the entry barrier and allow most of the potential customers to be able to use precision irrigation (reducing water needs by 50%, increasing yield by 30%) at their sites, resulting in great global water savings. Instead of investing EUR 10.000+ at once, customers will pay a monthly fee of EUR 200-250. We expect hundreds of thousands of new customers adopting IRRaaS to reduce global water consumption by 20% by 2030.
With funding from: