Published on February 17th, 2020 | by Emergent Enterprise0
Unpacking AR Business Models: AR as a Service
Ready to dive into augmented reality? You’re going to have a stakeholder asking for the ROI. This article at arinsider.co by Mike Boland shares several ways an AR solution can gain revenue especially in retail, consumer goods, and the entertainment industry. Certainly on the manufacturing and enterprise side of AR, ROI cases can be made for improvements in time, efficiency and budget. The cases in today’s article show ways where AR can encourage consumer spending. If the product is engaging and the value is evident, the ROI will speak for itself.
In AR’s early stages, a common question continues to be asked: where’s the money? There have been oscillations in excitement and doubt over AR, but the ultimate proof point will be revenue. Though aggregate revenues have disappointed, there are segments that are bearing fruit.
So we’ve determined the three biggest revenue categories for consumer-based mobile AR. We’ve examined them on qualitative and quantitative levels. The former entails product models, leading companies and best practices. The latter entails market sizing and revenue projections.
But before we dive into these models, continuing today with AR-as-a-Service, what are they at a high level? We categorize them as follows:
1. Advertising (brands pay)
2. In-app purchases (consumers pay)
3. AR-as-a-service (enterprises pay)
What is “AR-as-a-Service?”
We left off last week talking about “avatar-as-a-service” which leads right into the third and final revenue model of this report: AR as a service (ARaas). Like Saas did in the broader enterprise market, ARaaS will have a sizable impact on AR by democratizing its advanced capability.
This will include software that helps brands build AR lenses for marketing campagins. It’s helping retailers build in-store visualization, and 3D models of product inventory. It’s helping consumer goods companies make AR user guides for their products, or AR tie-ins for movie studios.
Following in the footsteps of enterprise Saas, ARaaS offers recurring revenue to providers and cash-flow friendly pricing for buyers. This will be a key building block for AR developers, as well as consumer-facing enterprises (or their agencies) that don’t have advanced in-house technical skill.
The key term is “building blocks.” In fact, ARtillery Intelligence’s 2019 predictions projected building blocks as a breakout AR category. We’re at the point in spatial computing’s lifespan when the proverbial “picks & shovels” are needed to enable developers and to accelerate growth.