Featured Article from Software Licensing

The manufacturing industry is clearly at the forefront of innovation when it comes to the Internet of Things (IoT), transforming the way devices communicate and the types of services they are capable of delivering. And as is the case with most networking and communication solutions, manufacturers are adopting a software-centric approach to the IoT to glean maximum value and efficiency.

This transformation is creating a significant shift in how hardware and software solutions are licensed and monetized. Flexera Software, a company that specializes in management and monetization in a software-centric world, has a unique perspective on the challenges and opportunities the manufacturing world is facing in the age of IoT. Manfred Bauer, major account manager at Flexera, works with manufacturers throughout Europe and recently discussed his observations in a blog post.

According to Bauer, digitization has had a significant impact on the entire manufacturing sector, creating a shift toward software-centric processes. This shift is enabling manufacturers to automate parts of production, embed software on devices (a key component for IoT), and easily create SaaS (News - Alert) and cloud applications for added value.

The robotics industry is also expanding in tandem with this shift, taking advantage of intelligent algorithms to aid humans with a variety of tasks. Data has also become a more important factor in manufacturing production, helping with automation and efficiencies in product lifecycle development and management.

“Prototyping is merely a digital process, thanks to advanced 3D-prototyping and CAD/CAM software,” said Bauer. “Simulation in prototyping and production processes means less defective goods, less damage to expensive machines or components and a high level of predictability when a new product hits the production line.”

The shift toward software-centric processes and digitization correlates with better management and monetization of IoT solutions and processes. According to Bauer, there are generally two software divisions in each IoT project he works on, which directly relate to licensing and monetization. One is the embedded software component, which is close to the device and required for control, change and updates to features, capacity and capabilities. The second division is generally the software built on top of the embedded component and designed to enable a wide range of use cases, typically delivered as SaaS or via the cloud.

Software monetization solutions can play a significant role in this delivery model, offering IP protection for processes and technologies that don’t necessarily fall under the traditional software purview. Similarly, software monetization offerings provide protection through tamper resistance, trusted storage and automated security patches. Solutions also manage software entitlements in the back office, a major benefit for manufacturers that traditionally don’t have software experience.

Monetization solutions also help manufacturers manage and deliver updates and upgrades as well as gather usage data on how their solutions and technologies are being used. Offerings can also track devices in the field to enforce usage compliance and avoid abuse.

“Software monetization strategies are closely connected to the success or failure of new digital offerings,” added Bauer. “Subscription models are already being widely used and create new and predictable revenue streams. Many manufacturers want to move to usage- or outcome-based models to profit from the ability to define metrics that work for their customers and enable additional monetization options.” 

That’s where software monetization and optimization platforms like Flexera’s come in, easily supporting automation and new business concepts and practices. With the IoT and digitization transforming the manufacturing sector throughout the world, software monetization is a benefit and a necessity.