The proliferation of intelligent, connected devices and the business solutions made possible with software present a wide array of lucrative opportunities for device manufacturers to monetize and leverage the Internet of Things (IoT). In this increasingly connected and intelligent world, device manufacturers are using embedded software and applications to differentiate while electronically controlling device capacity and capability, opening up entirely new markets and value-added services.
Device manufacturers that provide intelligence through software are able to:
- Monetize with innovative and flexible new licensing, pricing, and packaging models
- Differentiate and protect their offerings in highly competitive markets by delivering more value to customers
- Uncover new revenue opportunities from up-sell/ cross-sell activities and new licensing, pricing, and packaging models
- Reduce manufacturing and inventory costs
- Provide more value-added proactive support
Many device manufacturers are also battling commoditization and the risk of grey market abuse of their core hardware products, so they are turning to software and applications as a means to meet customer demands and bring products to market faster with greater business value.
Increasingly, device manufacturers are finding new opportunities to extend the value of the software, whether it’s used to control the device or leverage data from the device, by connecting them and uncovering new ways to leverage and monetize the Internet of Things (IoT) ecosystems.
Internet-connected devices powered by software and controlled via licensing and entitlement management systems open up myriad new revenue opportunities. For instance, innovative companies can leverage data reported back by the device on its operational status and behavior to develop new product and service offerings.
Internet-connected devices also can open up potential exposure to hackers, so device manufacturers also need reliable methods to monitor for such risks and repair any vulnerabilities that may arise.
Amy Konary, Research Vice President - Software Licensing & Provisioning at IDC
Creating intelligent devices and solutions for the Internet of Things offers device manufacturers the following business benefits:
Drive Topline Growth and Recurring Revenue Streams
- Create unique, differentiated solutions that deliver greater business value to customers
- Monetize of all aspects of their intellectual property – products (devices and software), capacities, capabilities and versions
- Support an array of pricing and licensing models (e.g., concurrent, subscription, usage-based) to meet varying market needs
- Enable new deployment models, such as virtual appliances, and provide add-on services using cloud deployments to appeal to varying market segments
- Control and provision the capabilities and capacity of devices electronically
- Reduce manufacturing and fulfillment costs and control contract manufacturers
Deliver Excellent Customer Experiences
- Provide 24x7 customer access to software products and licenses through a self-service portal
- Establish direct relationships with customers through multiple tiers of distribution
- Support the entire licensing and entitlement lifecycle to maximize up/cross-sell and recurring revenue
Another important benefit to connecting devices is the data that is being collected. Taking that data and analyzing it in a myriad of ways provides unique insights into the use of your products. Having accurate, aggregate-level product data enables Product Managers to make more intelligent marketing and Product Development decisions. With the ability to view relevant application log files on remote devices support technicians can proactively diagnose customer issues, debug application issues, and send software patches directly to the device to ensure customers receive uninterrupted service. For example, knowing when a pump is close to failure or a device is running old software or firmware, so that it can be updated before issues arise and the customer has to call for support.
Data such as device-specific profile information, application updates and event data can be leveraged to trigger revenue generating opportunities for product upgrades, add-ons or service calls – expanding the device manufacturer’s relationship with the customer and increasing revenue.
The diversity of use cases and benefits of the Internet of Things ecosystem are expanding to include using the data collected to find additional ways to monetize the offerings from the device manufacturer. For example, new business models can be created when the connection is used to share usage data from the device. Users of a device can be charged based on the number of discrete uses, usage levels during specific times of the day, concurrent number of users within an enterprise, geographic location, use of specific features, or any number of parameters.
This data can also be aggregated and analyzed for improved business intelligence. Monitoring patterns of usage consumption can:
- Increase sales activity for the products or features that are most highly valued, and in the most receptive markets
- Up-sell users to new levels of functionality or renew them at the most opportune time
- Focus development on the most valuable features, on the most widely deployed platforms
Internet of Things Ecosystem
According to IDC, the layers of the IoT ecosystem will uncover new revenue opportunities for device manufacturers. By 2020, IDC expects the entire market for IoT to generate $8.9 trillion with an installed base of 30 billion connected “autonomous” devices and an overall addressable market of 212 billion.
The intelligent systems (devices) and the applications – the embedded software or software tools that capture analytics – are at the core of the Internet of Things ecosystem. For that reason, device manufacturers need a way to increase and manage application usage, monetize and protect their IP, provide timely and secure software updates, and collect installed base and remote device analytics in order to increase the value and management of their devices and build a sustainable digital supply chain ecosystem. The hardware, software, services and communications infrastructure that makes digitization possible are the keys to uncovering new and recurring revenue opportunities. Digital products and services form the backbone of new business models that have different economics, operating models, and customer expectations.
Device manufacturers are embracing the opportunity to move beyond a device-centric business model to a solution-centric model in order to stay competitive in today’s market.
Software Licensing and Entitlement Management Solutions for a Connected World
Software and applications are fundamental to Internet of Things solutions and software licensing and entitlement management are foundational to a software business. Software licensing enables manufacturers to create new revenue streams and protect intellectual property by implementing and enforcing licensing models within your software/apps and enabling electronic control of device capacities and capabilities. Entitlement management runs the critical back-office operations of a software business by tracking what software each customer is entitled to and recording the evolution of their entitlements through the software lifecycle. Entitlement management provides an accurate view of customer software entitlements which enables the device manufacturer to capitalize on up-sell opportunities and ensure customers are always using the most up-to-date software and firmware. It enables device manufacturers to proactively send software/firmware updates and patches quickly and easily to prevent security issues. It also provides the capability to electronically configure new capacity to meet customer demands, reduce inventory, and bring new products to market faster.
Software licensing and entitlement management are key enabling technologies that empower device manufacturers to transform their businesses and build a sustainable digital supply chain ecosystem. Using software as a differentiator, and monetizing it, device manufacturers are able to transform from a traditional provider of hardware to a strategic solution provider.
Reduce Risk and Vulnerability Surrounding Internet- Connected Devices with Software and Firmware Updates
Another key requirement in establishing a digital supply chain ecosystem is security. With internet connected devices there will always be a risk from determined hackers that want to exploit vulnerabilities in the devices and the applications on the device. Enterprises fear exposing their customers to internet criminals without a means to fix the problem, and they also fear potential repercussions due to regulatory non-compliance.
Device manufacturers can alleviate some of these security concerns by using tamper resistant software licensing to protect against abuse and ensuring only authorized users have access to and are using device applications. In addition, they can proactively monitor devices for application issues and if an issue is uncovered quickly send out updates with an automated software update solution. The right update and entitlement management solution will provide secure downloads of software, bug fixes and security patches directly to the device or software application – ensuring the customer is running the latest software.
Flexera Software’s FlexNet Producer Suite for Intelligent Device Manufacturers empowers device manufacturers to create a digital supply chain ecosystem that monetizes the Internet of Things. It enables device manufacturers to unlock new and recurring revenue streams, protect intellectual property and implement configure-to-order manufacturing processes that dramatically reduce inventory while enabling greater responsiveness to changing market conditions. It delivers back-office entitlement management technology to streamline fulfillment, protect maintenance revenues, implement new revenue models quickly and establish direct relationships with customers through multiple tiers of distribution. The FlexNet Producer Suite is an end-to-end licensing, entitlement management and software delivery and update solution that drives recurring revenue streams and helps reduce cost and complexities.
FlexNet Licensing empowers intelligent device manufacturers to monetize and protect the IP that is at the core of the Internet of Things. Licensing enables manufacturers to increase revenues by easily facilitating new pricing, packaging and licensing models. It supports the full software licensing spectrum, from strict enforcement to usage-based trust but verify and enables software protection, monetization and compliance of SaaS, cloud, virtualized, on-premises and embedded applications. FlexNet Licensing is based on market leading FlexNet Publisher and FlexNet Embedded, used by over 3,000 application producers in over 20,000 applications.
FlexNet Operations gives device manufacturers the power to manage devices, software licenses and entitlements easily and efficiently. It automates the generation, fulfillment and activation of devices, software and entitlements to enable the manufacturer to cut costs. It offers a holistic, 24x7, selfservice Web portal for manufacturers, customers and channel partners to provide an excellent customer experience. It supports the movement towards usage-based trust-but-verify software licensing and compliance models by providing visibility into actual usage to support compliance initiatives. Lastly, it enables electronic software delivery of applications to devices.
Software Updating, Device Monitoring and Insights
FlexNet Connect keeps costs down by connecting manufacturers to users. It electronically delivers application updates (firmware and software), monitors device for application issues and sends messages directly to devices while at the same time providing deep customer insight into the installed base.
Global Consulting Services
Flexera Software Professional Services enables intelligent device manufacturers to accelerate and increase the value manufacturers receive from Flexera Software solutions. Our experts average more than ten years’ experience in business transformation initiatives including the move from a traditional provider of hardware to a strategic solution provider, including new licensing and pricing business models, entitlement lifecycle, licensing lifecycle, monetization, installation and electronic software delivery and updates. Through subject matter expertise, best practice and a proven methodology, we can help you implement and evaluate current or potential strategies to achieve your business objectives.
About Flexera Software
Flexera Software is the leading provider of strategic solutions for Application Usage Management; solutions delivering continuous compliance, optimized usage and maximized value to application producers and their customers. Flexera Software is trusted by more than 80,000 customers that depend on our comprehensive solutions — from installation and licensing, entitlement and compliance management to application readiness and software license optimization — to strategically manage application usage and achieve breakthrough results realized only through the systems-level approach we provide. For more information, please go to: www.flexerasoftware.com