2. Medical Equipment Providers: Speeding Time to Market and Building Revenue Streams with Embedded Software
2 Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series
Medical Equipment Providers: Speeding Time to Market
and Building Revenue Streams with Embedded Software
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. Specifically, licensing enables
medical equipment providers 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 software monetization solutions,
medical equipment 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 intelligent
device 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 medical equipment 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 the Medical
Equipment Arena
At a macro level, a convergence of business issues is driving
the software-based differentiation of medical equipment
– all of which can be capitalized upon with software
monetization solutions:
• Changing Economics of Intelligent Device Manufacturing:
The global market for medical equipment is large and
growing, attracting new entrants and putting time-to-
market pressure on all participants. Solution providers
seek better ways to differentiate themselves; software
is a key means to creating competitive advantage and
driving incremental revenue.
3. Medical Equipment Providers: Speeding Time to Market and Building Revenue Streams with Embedded Software
3Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series
• Growing Revenue Contribution from Software: As a
corollary to the commoditization of hardware, many
medical equipment 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, medical 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 medical equipment provider is
to determine how to limit access to certain functions of
software, without changing the configuration or SKU
of the product. Achieving this goal also streamlines
securing approval from the U.S. Food and Drug
Administration (FDA) on equipment modifications.
Licensing-based approaches allow medical equipment
providers to enter new markets with a full-function
device, and then, as FDA approval is gained on
software changes, create lower or higher price
points with the same device by enabling new
software functions.
• 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, and possibly patient safety.
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, healthcare customers are
demanding more flexible pricing models, easy
access to upgrade features, and a superior customer
experience. Embedded software licensing capabilities
allow medical manufacturers 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 medical equipment 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
• 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 Intelligent Device
Manufacturers’ Unique Needs
FlexNet Producer Suite for Intelligent Device Manufacturers
is the most comprehensive end-to-end solution software
monetization available today. Medical equipment providers
can benefit from Flexera Software’s support for the largest
number of embedded software license models; 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 medical
device manufacturers to use it across both large- and
small-footprint devices.
4. Medical Equipment Providers: Speeding Time to Market and Building Revenue Streams with Embedded Software
4 Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series
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 has numerous features that
have been optimized for medical devices, 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 costs to be kept low by using licensing to
configure capabilities 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.
• Licensing, Entitlement Management and Delivery
from End to End: provides 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: Flexera Software Helps a Medical
Equipment Provider Speed Time to Market and Build
Revenue Streams
A Tier 2 medical equipment provider of low-cost ultrasound
systems recently looked to Flexera Software for a software
monetization solution to speed its time to market with a
new low-cost two dimensional (2D) system, and establish a
built-in upgrade revenue stream for the system’s forthcoming
3D capabilities.
FlexNet Producer Suite helped the medical equipment
provider to:
• Lower future manufacturing and inventory carrying
charges by 50 percent
• Enable field upgradeability of the 2D product
• More effectively enable dealer demonstration devices
FlexNet Producer Suite Speeds Time to Market
As a Tier 2 provider, the medical equipment provider
wanted to seize market share from more established players
by coming to market first with a compact, quiet, low-cost
portable 2D ultrasound station. It also had a 3D machine
in development, and anticipated gaining FDA approval
within a year. The company wanted to capitalize on the
current market opportunity for the low-cost 2D machine, and
maximize future revenues when the 3D machine became
generally available. FlexNet Operations and FlexNet
Licensing, part of the FlexNet Producer Suite, allowed
the medical equipment provider to achieve both these
objectives with secure and flexible licensing.
Today’s hospitals use a network-based picture archiving
and communications system (PACS) to store and transport
medical images. The medical equipment provider took
advantage of this operating model to deploy FlexNet
Operations on its end to manage configured entitlements,
license fulfillments, returns and transfers.
FlexNet Licensing was used to build a management console
that binds entitlements to configurations. The management
console communicates with FlexNet Operations over an
Internet connection. Networks that connect into a hospital’s
PACS typically have gateway access to the Internet, to send
images to other institutions – an ideal environment for the
medical equipment provider’s new licensing strategy.
Flexera Software Reduces Future Manufacturing and
Inventory Costs by Half
Prior to adopting the software monetization from Flexera
Software, the medical equipment provider intended to
use traditional manufacturing methods to mass-produce a
fixed number of the 2D and 3D ultrasound systems. With
FlexNet Producer Suite, they manufacture a single piece of
equipment for both Model 2D and Model 3D (Model 2D is
the low-end system and Model 3D is the high-end system.)
Model 2D contains all of the components and software
necessary to deliver Model 3D capabilities; when the
company receives FDA approval, Model 3D will be created
by invoking different configuration parameters, enabling the
3D graphics capability.
“FlexNet Producer Suite allows us to achieve major new
efficiencies in manufacturing and inventory,” says the
vice president of operations at the medical equipment
provider. “We anticipate that it will help us to cut associated
manufacturing and inventory carrying costs in half.”
Field Upgradeability Increases Revenues
Before deploying FlexNet Producer Suite, the medical
equipment provider’s equipment could only be upgraded
by a certified technician on-site. This expensive approach
entailed significant lag time in deploying new capabilities.
Now, with FlexNet Producer Suite, upgrades to the 3D
system will easily be executed on-site by the hospital’s IT
organization.
When the 3D system receives FDA approval, a hospital
IT administrator will use an Internet gateway to establish
5. Medical Equipment Providers: Speeding Time to Market and Building Revenue Streams with Embedded Software
5Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series
a secure connection and access the equipment provider’s
FlexNet Operations system. A new entitlement will then be
downloaded to the ultrasound system – in effect, upgrading
the license. When the ultrasound system is re-booted and
re-initialized, it will recognize the new 3D configuration
parameters, and the upgrade will be complete.
“Field upgradeability is a major benefit to customers,
dealers and our company,” says the vice president of
operations. “By eliminating the time and expense of on-site
service, we can quickly upgrade our systems to deliver
maximum value. This also translates into increased revenue
as the more systems are upgraded from Model 2D to
Model 3D.”
Enhancing Dealer Relationships with High-Performance
Floor Models
The medical equipment provider is additionally leveraging
Flexera Software technologies to deliver demonstration
models to dealers that are specifically configured to meet
their needs. “Before adopting FlexNet Producer Suite, we
had two problems: first, we had demonstration models,
which are provided to medical equipment dealers at a
discount, being sold on the grey market. Second, if we sent
demo systems that were not viable for resale, they were not
properly showcasing our equipment’s capabilities,” he says.
Using FlexNet Producer Suite, Model 2D and Model 3D
demonstration systems can be configured specifically for
demonstration purposes, which typically entails disabling
data-saving features. “Without data-save capabilities,
any potential resale value or unauthorized use vanishes,
because the ultrasound images the user takes cannot be
saved,” the vice president of operations says, adding, “it’s
yet another complex problem that was easily solved with
FlexNet Producer Suite.”
As this medical equipment provider leverages the software
monetization solution from Flexera Software to improve
numerous aspects of its business, the power of FlexNet
Producer Suite is clear: beyond traditional software and
computer hardware applications, Flexera Software enables
medical equipment providers to increase profit margins
while reducing manufacturing and operations costs.
Summary
Medical equipment providers are increasingly shifting to
a technology and business model that emphasizes value
delivery through software. Flexera Software’s 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
medical equipment providers 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/medical
where you can learn more about the valuable
opportunities Flexera Software offers.