How Intelligent Device ManufacturersW H I T E PA P E R Are Using Embedded Software to Grow Revenue
How Intelligent Device Manufacturers AreUsing Embedded Software to Grow RevenueOverview Flexible Device ConfigurationIncreasingly, the value of your intelligent device is based Many intelligent device manufacturers today are simplifyingon the software or firmware delivered with the device. The their production lines by manufacturing the same device forflexibility of software allows you to sell many differentiated multiple models. They may package model-specific softwareproducts while streamlining your manufacturing process. with that device. To differentiate the device, they include model-specific configuration of both the deviceProtecting your software R&D investment is critical to and software.monetizing your platforms and ensuring a steady revenuestream. But the fact is, paper- and trust-based licensing A License as a Tamper-Resistant Configurationprograms are no longer adequate. Moving to electronic Today, you may already differentiate device models bylicensing allows you to protect and grow your revenue, their configurations, but how easy is it for someone towithout complex changes to your manufacturing processes. intentionally or unintentionally copy that configuration to a device licensed for a less-expensive configuration?This whitepaper describes how you can use electroniclicense management technology to protect and enhance your Robust license management systems are designed to encodeproducts, and how to distribute updates and upgrades to configuration information in a human-readable form,your already-deployed device, regardless of your industry: whether it is a device or software configuration—and thennetworking, telephony, imaging, printing, medical devices. to enforce the limits of that configuration. While in this form, if the configuration is unintentionally or intentionallyCreating Differentiated Products changed, the license management system can detect suchChances are, you are already enhancing your devices with a change. Furthermore, once the configuration is bound tosignificant software development. It’s time to monetize that a device, it can’t be copied to another device without theinvestment using electronic license management, which consent of the intelligent device manufacturer.ensures that your devices are used in a manner consistentwith your license terms. Does this mean that the intelligent device manufacturer must manually approve all transactions where a customerIn addition, it is likely that you are facing intense competition, has a legitimate reason to move a configuration from oneresulting in your devices becoming commoditized, thus device to another? Not at all. Automated license entitlementdriving down your profit margins. If you are looking for and license fulfillment systems can be employed that allowcreative ways to increase margins without re-tooling your customers to self-manage their fulfillments within parametersmanufacturing line, look to differentiating your devices you define. Such systems can be made to implementthrough their software capabilities. business policies that prevent abuse; for example, you can allow the customer to move/rehost a license to anotherRather than relying on special configurations to differentiate device once every six months.your devices, using software that implements newcapabilities lets you ensure that those capabilities are onlyavailable to users who are entitled to them. These multipleconfigurations will set you apart from your competitors andprovide better delineation within your own product lines.
Compliance and Enforcement • ustomer renews (or elects not to review) his CIntroducing license management into your customer base does maintenance plannot imply that you mistrust your customers. These days, CIOs • Customer accepts a trial offer to upgrade his deviceare concerned that their employee base might unintentionally • ustomer accepts a limited-time promotional offer to Cuse the products they buy beyond the agreed upon terms. upgrade his deviceHowever, these same CIOs don’t have the budget to do an • Customer purchases a companion productinternal audit to determine how these products are used. • etc.Instead, they look to their vendors for an automated meansby which they can be assured that all of their licenses are Entitlement upgrades are then fulfilled by only deliveringin compliance. Therefore, license management is often a the license, so in addition to protecting software fromwelcomed feature of products they buy. unauthorized use, it avoids the expensive and inconvenient process of having to replace the device.That said, even an honest purchasing manager does notguarantee that the users they represent share the same Visibility through Your Distribution Chainrespect for your intellectual property. If an employee has When you sell a device through the channel, it is likely thatbecome disgruntled and is looking for a way to hurt a you have no visibility as to when and where your product iscurrent or former employer, he might choose to do this by fulfilled. While you want to honor your distribution partners’stealing from you. right to own and manage your common customers, knowing exactly what is being fulfilled, when it is being fulfilled, andOf course, there are also regions of the world which do not through what partner can give you valuable insight intohonor contractual terms and impose their own, more liberal, your business.standards for the use of your products. Protecting both youand your distribution partners from this potential abuse can Instead of putting devices into the channel and neverbe valuable to your business. hearing from those products again, you can create the need for each device’s user to contact you in order to fulfillPossession is No Longer 9/10 of the Law a license for the device. This license fulfillment can beHistorically in the intelligent device market, the adage of automated, manual, or you can offer it both ways.“possession is nine-tenths of the law” has been the norm.That is, once in physical possession of your device, the You can also offer registration in order to gain furthercustomer had access to all of its capabilities. Adding insight into your users, giving you the ability to touch thelicense management to a device still gives full access to the end user through a long distribution chain.possessor, but now your customer is in possession of thelicense, not the device. Summary Now that software is a differentiator for intelligent deviceAs a first step, you can pre-install an electronic license on manufacturers, what used to be solution-specific devicesdevices before you or your distribution partner sells the are becoming a platform on which to build solution-specificdevice. This method alone will reduce manufacturing costs, software. This trend mimics the early days of softwarebut you can do even more. development on what has now become the general-purpose platforms we all use today.To allow flexibility, an electronic license can expire overtime or apply only to a particular version of the device and As a result, intelligent device manufacturers have allits software. These characteristics give you the ability to the opportunities, and all the challenges, of softwaregrant electronic licenses for a variety of different reasons. developers. Fortunately, device manufacturers haveEntitlements can be granted as a result of many events, available to them the tools and best practices to managefor example: their software offering. • Customer purchases the product • ustomer purchases new capabilities for an already C deployed product • ustomer purchases additional capacity for an C already deployed product
How Intelligent Device Manufacturers Are Using Embedded Software to Grow Revenue Solutions that Maximize the Value of Embedded Software To monetize their embedded software, device manufacturers rely on Flexera Software FlexNet® Producer Suite for Intelligent Device Manufacturers. It can help you maximize the value of software that’s embedded or bundled with your devices by: • Innovating product faster • Reducing manufacturing costs • implifying distribution S Flexera Software FlexNet Producer Suite for Intelligent Device Manufacturers Solution enables device manufacturers to unlock new licensing, packaging, pricing, and promotional models; streamline manufacturing, inventory, and distribution management; and simplify product updates. 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 enterprise license optimization - to strategically manage application usage and achieve breakthrough results realized only through the systems-level approach we provide. Flexera Software is a privately-held company and an investment of private equity firm Thoma Bravo, LLC. For more information, please go to: www.flexerasoftware.com You can learn more about this solution, download datasheets, and watch Webinars by visiting: www.flexerasoftware.com/devices4