For many years, Deere & Co has sold its tractors and other tools to farmers, but the world’s largest agriculture equipment manufacturer is taking a page from the tech world’s playbook, merging cutting-edge hardware with software and subscription models to drive revenue growth.
In a world where grain farmers are declining and the population is growing, Deere and its competitors are developing self-driving machines equipped with the latest software that are producing a new kind of bountiful crop: information. All of this translates to recurring revenue, which firms like Apple and industrial producers like Deere have long coveted.
“The more expertise we can build to allow farmers to get more productivity out of their land without having to spend as much money on fertilizer and inputs, the better off everyone is,” Julian Sanchez, Deere’s head of emerging expertise, told Reuters.
For Deere and competitors AGCO and CNH Industrial, automation for high-horsepower tools is just getting started. The next stage, according to Sanchez, is to equip machines to sow seeds using satellite tv for pc images and soil information.
While Deere has not indicated what this means for its bottom line, General Motors Co said last October that it was aiming to invest up to $25 billion in software-driven startups by 2030, and that its Cruise self-driving subsidiary might generate $50 billion in annual revenue within six years.