Deere looks to increase revenues from software fees

According to a recent Wall Street Journal article, US tractor manufacturer John Deere estimates that 10 percent of its revenue will come from fees for using software by the end of the decade. This is in the wake of Deere’s plans to release self-driving tractors that can plow fields autonomously and sprayers that can distinguish between weeds and crops.

This projected figure highlights how farmers are increasingly relying on manufacturers to be allowed to use the equipment that they already purchased and own. Illinois PIRG Education Fund released a report early last year explaining how newer software technologies can make it harder for farmers to fix their equipment without having to go to an authorized dealer. In a survey, 77% of farmers said they purchased older-model equipment to avoid software in newer equipment.

Software isn’t the problem—subscription-based business models that undermine ownership are. The newer software should be solving problems, not creating them. Deere should figure out how to change its business model and center it around creating great products versus creating products that require Deere’s permission to use after purchase.