An anonymous reader quotes a post from The Register: US agricultural machinery giant John Deere has estimated that software fees will account for 10 percent of the company’s revenue by the end of the decade. Chief Executive John May offered the prediction in a Wall Street Journal report on how Deere has invested billions in developing self-driving tractors and sprayers that can distinguish weeds from crops. While farmers are already struggling with operating costs, including fertilizer and fuel, Deere wants to sell subscription software to drive its increasingly intelligent vehicles.
Bernstein analysts estimate that the average gross margin for agricultural software is 85 percent, compared with 25 percent for hardware sales. All Deere tractors and combines come with autopilot as standard after decades of farmers transitioning to more technological farming. However, the company now plans to have 1.5 million machines and half a billion acres of land connected to the John Deere operations center within a few years. This cloud-based service “will collect and store crop data, including millions of images of weeds that can be sprayed with herbicide.” Last year, Deere also acquired California startup Bear Flag Robotics for $250 million to turn old tractors into autonomous vehicles using software. For a company that has cornered the heavy equipment market, the move is unlikely to be popular with farmers. The report goes on to note that a number of farm advocacy and repair organizations have filed complaints with the FTC, “alleging that Deere unlawfully refused to provide software and technical data necessary to repair its machinery, in violation of the Sherman Act and laws covering unfair and deceptive practices.” trade practice”.
