Thanks for this, Rhishi. I think this is a critical conversation. As you look across industries, many have already made this transition from being largely product- to service-oriented, thanks to technology and innovative as-a-service business models. The companies and their customers become leaner and less waste is generated, allowing more value to be shared between the company its customers. Company revenue becomes less cyclical and higher margin, demanding a higher valuation multiple and offsetting the lower absolute revenue dollars for shareholders. Agribusiness has a tremendous opportunity here to fully align their offerings with their customers' outcomes and drive real efficiency and profitability on the farm, but the transition is extremely difficult when the entire value chain is organized around product sales. This creates tons of space for the most innovative of the incumbents, like Deere, as well as startups that can crack the code for adoption of their technology and services. It's very interesting to see how many of the startups out there are already organizing this way, even where significant hardware expense is involved. I expect we will see this become increasingly common in Ag over the next decade. Exciting times!
Thanks for this, Rhishi. I think this is a critical conversation. As you look across industries, many have already made this transition from being largely product- to service-oriented, thanks to technology and innovative as-a-service business models. The companies and their customers become leaner and less waste is generated, allowing more value to be shared between the company its customers. Company revenue becomes less cyclical and higher margin, demanding a higher valuation multiple and offsetting the lower absolute revenue dollars for shareholders. Agribusiness has a tremendous opportunity here to fully align their offerings with their customers' outcomes and drive real efficiency and profitability on the farm, but the transition is extremely difficult when the entire value chain is organized around product sales. This creates tons of space for the most innovative of the incumbents, like Deere, as well as startups that can crack the code for adoption of their technology and services. It's very interesting to see how many of the startups out there are already organizing this way, even where significant hardware expense is involved. I expect we will see this become increasingly common in Ag over the next decade. Exciting times!