Adoption and impact of the industrial IoT and patterns for monetizing

1. © 2015 Flexera Software LLC. All rights reserved. | Company Confidential1
Edward McNeil
Software Monetization Services
Flexera Software
Patterns for
Monetizing
the IoT

2. © 2015 Flexera Software LLC. All rights reserved. | Company Confidential2
New
Business
Models
Industrial IoT =
Opportunity
Challenge
Data, Data, Data…
Hardware + Software
+ Connectivity

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Adoption and Impact of the Industrial IoT*
Operational Efficiency
• Asset utilization
• Operational cost reduction
• Worker productivity
New Products & Services
• Pay-per-use
• Software-based services
• Data monetization
Outcome Economy
• Pay-per-outcome
• New connected ecosystems
• Platform-enabled marketplace
Autonomous, Pull Economy
• Continuous demand-sensing
• End-to-end automation
• Resource optimization
Near-Term Long-Term
*Industrial Internet of Things: Unleashing the Potential of Connected Products and Services, World Economic Forum, 2015

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Key Questions
• What do I need to implement new business and revenue models and to
start selling services rather than products?
• How do I monetize my solutions and increase renewal rates?
• How do I move to SaaS and Cloud to fulfil my customer’s needs?
• Do I really know my customer base and provide them with a great
experience?
• How do I support scalability & rapid change at low cost?
• What does it take to manage customer entitlements in a multi-level sales
organisation?
• How do I get my Sales team to change habits to sell software ?

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Adoption and Impact of the Industrial IoT*
Near-Term Long-Term
Operational Efficiency
• Asset utilization
• Operational cost reduction
• Worker productivity
SKU Reduction
Industrial automation
firm reduced # of unique
control panels from ~500
to ~5
Use Case:

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New Products & Services
• Pay-per-use
• Software-based services
• Data-monetization
Adoption and Impact of the Industrial IoT*
Near-Term Long-Term
Cloud Based Power
Management Software
Recurring revenue
subscription license model for
cloud-based IT systems
management control and
monitoring.

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Outcome Economy
• Pay-per-outcome
• New connected ecosystems
• Platform-enabled marketplace
Adoption and Impact of the Industrial IoT*
Near-Term Long-Term
Ultimate Outcome
Charge per hours of operation,
and provide all ongoing
maintenance and support.

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Autonomous, Pull Economy
• Continuous demand-sensing
• End-to-end automation
• Resource optimization & waste reduction
Adoption and Impact of the Industrial IoT*
Near-Term Long-Term
Public Safety …. As-a-Service?
Monetize embedded and server
software across an entire public safety
value chain from radios & cameras to
video processing and jail management.
Can offer an entire solution as a service
– priced per public safety officer per
year.

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A unit of Usage to Apply Pricing
• Simple, Fair, Scalable, Measurable
• CPU, Server, named user, etc
• Use Model
Revenue Generation Model
• Recurring vs. Up‐front Revenue
• Perpetual, Subscription, Utility, etc
Compliance Approach
• Philosophy & Vision
• User Experience
Technology Considerations
• Common License Layer
• License Key Methods & Structure
License Entitlement & Fulfillment
• Business Systems & Integration
• Business Processes
Commercial Structure
• Product Taxonomy & Structure
‐ Products, Bundles, Suites….
‐ Upgrade, Upsell, Update, etc
• Commercial Units
SWM Success Framework
License Model
Product (Line) Strategy &
Structure
Corporate Business
Drivers & Principles
Prospect‐to‐Support
Systems & Processes
Customer
Needs
Product &
Market Climate
License Metrics
Compliance Strategy
Enforcement
Revenue
Model &
Commercial
Intent
Compliance &
Enforcement
Policies:
• Moves
• Transfers
• WAN
• Mobile Users
• Demo
• Development
• Maintenance
• EOL
Entitlement
Management

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How Do I Get Started?
Prepare . . .
Define . . .
Execute . . .
Go‐To‐Market
Software

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How Do I Get Started?
Act Quickly

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THANK YOU!
www.flexerasoftware.com/swm
Edward McNeil
Director Software Monetization Services
Flexera Software
emcneil@flexerasoftware.com