Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times


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Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times

  1. 1. WHITEPAPER Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times
  2. 2. Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times 2 Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times Introduction More than ever, embedded software is playing a central role in intelligent device manufacturers’ go-to-market strategies. This trend is especially apparent in markets such as telecom, test and measurement, healthcare, and industrial automation – where manufacturers are under increasing pressure to innovate, rapidly enter new markets, control costs, maximize incremental revenue from existing customers, and deliver a competitively differentiated customer experience. As embedded software has become more integral to their business, more and more manufacturers are discovering the power of software licensing. With licensing, manufacturers can turn device features and/or capacity on and off as appropriate. This allows them to charge customers for the capabilities they want, while not charging them for capabilities they don’t want. Licensing thus enables manufacturers to more effectively use embedded software as a means of managing and monetizing the features and functionality they provide in their devices. By adopting the right licensing models, industrial automation providers can: • Produce different products on the same hardware chassis. This drives down costs by eliminating the need for additional production lines and minimizing the number of SKUs that have to be kept in inventory. • Create innovative products on existing hardware chassis. This reduces the cost and time it takes to bring differentiated products to new or existing markets. • Up-sell existing customers by simply activating additional device capabilities or capacity. This makes it easier to capitalize on incremental revenue opportunities. • Meet evolving customer needs without requiring them to swap out hardware or otherwise disrupt their operations. This makes for a more positive ongoing customer experience. These examples highlight why software monetization is such a compelling best practice for manufacturers. In fact, in today’s highly competitive and fast-moving markets, the skill with which manufacturers structure the monetization of their embedded software – and the diligence with which they manage their customers’ entitlements – may well turn out to be what separates market leaders from other players. This whitepaper outlines key trends and opportunities influencing industrial automation solution providers today, and how Flexera Software FlexNet® Producer Suite for Intelligent Device Manufacturers can help these companies to fundamentally improve their business. In addition, the whitepaper illustrates the power of software monetization solutions with a customer implementation scenario. Trends and Opportunities in Industrial Automation In today’s ultra-competitive global business environment, many intelligent device manufacturers are applying software monetization principles to hardware that uses electronic licensing to control and manage a wide range of functions. Within the industrial automation category, this approach is being applied across many domains including: • Building systems management, as the green building movement drives the development of sophisticated systems to control heating, ventilation, air conditioning (HVAC) and lighting. • Industrial wireless, as these new wireless networks quickly become integrated with standard plant and office networks.
  3. 3. Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times 3Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series • Embedded software intelligence and diagnostics, as embedded software operating information and self- diagnostics reduce the need for expensive on-site factory service. • Internet of Things (IOT) and Machine-to-machine (M2M) communications that are unleashing a wave of new productivity such as improved asset management and new service initiatives. • Automation system security, since most of today’s automation and control systems use the same hardware, operating systems, and communications as broadly deployed networks. Security has become an urgent issue. • Consumer-influenced industrial automation, as trends such as Internet access via cellular phones drive the development of industry-specific applications. At a macro level, complementary business issues are driving the software-based differentiation of industrial automation solutions – all of which can be capitalized upon with embedded software licensing solutions: • Changing economics of intelligent device manufacturing: The underlying hardware and core operating system software in many devices is being commoditized, as industrial automation solution providers seek to gain economies of scale by using more standardized components. Industrial automation solution providers are increasingly buying, versus building, core subsystems and system software. As a result, their role is evolving to more of an integrator, and less of a manufacturer. Solution providers seek better ways to differentiate themselves; software is a key means to creating competitive advantage and driving incremental revenue. • Growing revenue contribution from software: As a corollary to the commoditization of hardware, many industrial automation solution providers are focusing more resources on software development. As such, software enables new revenue sources and provides a way to deliver a superior, differentiated customer experience. • Software-enabled supply chain transformation: With the underlying hardware becoming more powerful and at the same time commoditized, manufacturers can now build fewer base configurations and deliver more functions. Product capabilities, capacity, versions and price points can be created and modified based on functions that can be turned on and off by licensing of the embedded software. This dramatically streamlines the supply chain and manufacturing processes, as well as lowering inventory carrying costs. The challenge for the industrial automation solution providers is to quickly bring to market devices that are tailored to meet the unique needs of a particular segment or new market, while keeping manufacturing costs low to meet margin requirements. Licensing- based approaches allow industrial automation solution providers to enter new markets with a full-function device, and then create lower price points with the same device by enabling a subset of capabilities/ capacity if lower-priced competition enters the market. • Brand and revenue erosion from grey market abuse: As underlying device configurations become more standardized, grey market theft can be perpetrated more easily. For example, demonstration models of products increasingly find their way into the grey market via channels for selling used equipment. These devices are running improper software and typically do not function correctly, posing a serious threat to the customer experience. In addition, grey market sales jeopardize maintenance revenues, as manufacturers lose track of device ownership and thus the maintenance relationship. • Customer preferences: In today’s ultra-competitive business environment, customers are demanding more flexible pricing models, easy access to upgrade features, and a superior customer experience. Embedded software licensing capabilities allow industrial automation solution providers to meet all of these customer requirements by enabling important capabilities such as field upgrades and a consistent, streamlined customer experience across products. Turning to Flexera Software for Answers As industrial automation solution providers address these trends, they increasingly recognize that they face similar issues as software companies. Today’s intelligent device manufacturers are looking to Flexera Software to help them: • Reach new markets by creatively packaging and pricing embedded software • Build revenues by better monetizing capability and capacity • Cut manufacturing costs by using software to differentiate capabilities on devices, and thus reduce the number of unique SKUs • Accurately track customer entitlements and usage • Track channel partner activity, and maximize service and maintenance revenues • Prevent unauthorized use of capabilities without cutting off legitimate customers • Reduce the operational costs associated with shipping software upgrades
  4. 4. Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times 4 Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series • Cut customer support costs by offering customers and channel partners self-service and keeping them current on the latest version • Make better development and marketing decisions based on device usage data FlexNet Producer Suite Addresses the Unique Needs of Industrial Automation FlexNet Producer Suite for Intelligent Device Manufacturers is the most comprehensive end-to-end solution for licensing, entitlement management and delivery available today. Industrial automation solution providers can benefit from Flexera Software’s support for the largest number of embedded software license models and the inherent flexibility of the system. FlexNet Producer Suite provides a single operations view to easily integrate products across multiple software licensing schemes. Flexera Software supports dozens of platforms – the widest range in the industry – enabling industrial automation manufacturers to use it across both large- and small-footprint devices. FlexNet Producer Suite for Intelligent Device Manufacturers leverages Flexera Software’s 25 years of industry experience, helping to maximize revenue, cut costs, and eliminate manual processes. It is optimized for intelligent device manufacturers, including: • Small footprint, embedded client: offers a licensing toolkit that is highly modular, supports several license models, and has a very small footprint (under 50K). This allows intelligent device manufacturers to keep costs low by using licensing of the embedded software to configure capability and capacity on a device while producing a minimum number of device types (SKUs). • High configurability: allows key elements such as security and binding to be configured or replaced as needed. This provides additional flexibility to fine-tune the solution to meet exact requirements or take advantage of existing device capabilities, while keeping the footprint small. • Hands-free activation and silent trials: provides hands-free activation and silent trials that don’t require registration. This transparent in-product activation improves the customer experience and increases upgrades/up-selling by enabling easy trials for new capabilities. • End-to-End Licensing, entitlement management and delivery: a single view for you, your customers and your channel partners to view and manage software embedded on devices and enables you to electronically turn on and off functionality. Case Study: A Global Building Automation Company Streamlines Inventory and Reduces Cycle Times with Flexera Software Today’s high tech buildings comprise a plethora of sophisticated systems to control everything from HVAC to security and fire protection. And just as every building is different, so are the systems that orchestrate these functions. For a global building automation company, this inescapable fact created enormous complexity in manufacturing and inventory management, which had a negative ripple effect across numerous other aspects of its business. Today, the building automation company is using FlexNet Producer Suite to put product customization capabilities into the hands of its customers, reducing the number of SKUs it needs to manufacture and inventory from several hundred SKUs to just a few. This in turn speeds cycle times – new systems can be live in just an hour, compared to several weeks – and lowers the potential for human error. A challenging economy requires operational innovation “In the US, the challenging economy has had a big impact on the construction industry, which directly affects us,” says the manager of integrated solutions at the building technology company. “We were looking for innovative ways to differentiate ourselves from our competitors and boost operational efficiencies. We met both of these objectives with Flexera Software FlexNet Producer Suite. “FlexNet Producer Suite has transformed the way we do business,” he says. The building technology company refers to the Flexera Software solution as License Manager. “Before, to change capability in a deployed unit, we had to physically remove the old unit and put in a new one. Now that can be remotely enabled with License Manager. “Likewise, License Manager has dramatically reduced the number of SKUs we have to manufacture and manage,” he continues. For example, one of the company’s top hardware platforms has 12 hardware variations and 40 firmware variations, creating 480 SKUs for a single product line. License Manager allows us to manufacture and stock just two base products, which are customized in the field with entitlement licenses created using FlexNet Licensing, in conjunction with the company’s SAP enterprise software system. FlexNet Producer Suite enables flexibility and business efficiency The manager of integrated solutions and his team created a simple, three-step process that allows licenses to be generated on demand with License Manager by entering an order in the SAP system. SAP automatically feeds the order
  5. 5. Enhancing Industrial Automation Solutions with Embedded Software: New Efficiencies and Faster Cycle Times 5Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series into FlexNet® Operations, Flexera Software’s entitlement management system. The license is then emailed to the user, who activates system functionality on site by entering the entitlement identification number into the building’s management console (a workstation) or directly into the device (such as an HVAC controller) through its Human Machine Interface. “Simply put, I love Flexera Software FlexNet Producer Suite. Our License Manager system couldn’t make the entitlement management process any easier for the field organization,” he says. The quick, three-step process that the building automation company implemented is in sharp contrast to the two week-plus turnaround time that previous ordering and manufacturing processes required. “Our inventory costs have dropped significantly,” the manager of integrated solutions says. “It’s not just the physical components themselves, it’s the time required to manage everything.” Merchandise returns have also dropped. “Due to the high number of variations within each of three major project lines, the previous ordering process made it easy to make specification errors, resulting in returned merchandise that had to be restocked. This created a fairly large pool of inventory that was difficult to repurpose,” he explains. Ease of use for all In addition to creating an easy-to-use system for technical users, the manager of integrated solutions, a business user with no formal IT training, found Flexera Software FlexNet Producer Suite exceptionally easy to deploy. “I’ve done all of the installations and upgrades to FlexNet Operations myself, with a little help from Flexera Software’s fantastic support team. I was thoroughly impressed with the clarity of the documentation. It walked me through all the steps easily; I didn’t even have to get help from one of our own IT people.” Based on the building technology company’s success with utilizing FlexNet Producer Suite to automate the licensing of its key product line, he is enthusiastic about applying this breakthrough technology across the company’s product line. He summarizes, “With License Manager we have achieved major business improvements. We are serving our customers better with faster velocity and greater agility. Flexera Software has helped us reduce the manufacturing complexity of a very sophisticated product line down to just two models. I am excited to see how Flexera Software solutions will continue to benefit our company and, ultimately, the construction industry we serve.” Summary Industrial automation solution providers are increasingly shifting to a technology and business model that emphasizes value delivery through software. FlexNet Producer Suite is the industry-leading software monetization solution for intelligent device manufacturers - unlocking revenue of embedded software and reducing operational costs while streamlining manufacturing processes. FlexNet Producer Suite also delivers unified entitlement management in both cloud and on-premises options. As competition intensifies in today’s global market, maximizing customer satisfaction, increasing revenues and reducing costs remain top business imperatives. FlexNet Producer Suite for Intelligent Device Manufacturers allows companies to: • Penetrate new markets through cost-effective, software- driven product differentiation • Improve customer satisfaction by offering self-service and a consistent experience for downloading, using and upgrading products • Reduce the number of SKUs that must be manufactured, carried and supported • Enable electronic upgrades • Fully monetize maintenance programs with better tracking of channel and end-customer entitlements • Allow new up-sell capabilities to be sampled and activated in the field About Flexera Software Flexera Software helps application producers and enterprises increase application usage and the value they derive from their software. Our next-generation software licensing, compliance and installation solutions are essential to ensure continuous licensing compliance, optimized software investments and to future-proof businesses against the risks and costs of constantly changing technology. Over 80,000 customers turn to Flexera Software as a trusted and neutral source for the knowledge and expertise we have gained as the marketplace leader for over 25 years and for the automation and intelligence designed into our products. For more information, please go to: www.flexerasoftware.com For more information, please go to: www.flexerasoftware.com/industrial where you can learn more about the valuable opportunities Flexera Software offers.
  6. 6. Flexera Software LLC (Global Headquarters): +1 800-809-5659 United Kingdom (Europe, Middle East Headquarters): +44 870-871-1111 +44 870-873-6300 Australia (Asia, Pacific Headquarters): +61 3-9895-2000 For more office locations visit: www.flexerasoftware.com Copyright © 2015 Flexera Software LLC. All other brand and product names mentioned herein may be the trademarks and registered trademarks of their respective owners. FPS_WP_IndustAutomation_Jan15