I recently published an article on sandhill.com about the adoption of emerging business models for IoT-connected devices. The article looks at how IoT connectivity has led to increased risk for hardware manufacturers, namely IP theft, piracy, misuse, and reverse engineering, and how software monetization solutions can help overcome these risks.

Beyond the challenges, there are many golden opportunities to be had. New business models have emerged from the IoT’s connected ecosystem, along with customer self-service and usage tracking capabilities. At the same time, connected devices enable manufacturers to digitally deliver software and manage user entitlements, eliminating manual operational tasks and costs associated with licensing. This, in turn, helps them introduce new products and features faster and with greater ease.

As the IoT continues its rapid growth, the market is shifting further away from traditional business models. Hardware manufacturers are adopting alternative models such as subscription and pay-per-use that allow them to retain their competitive advantage and tap into new, previously inaccessible markets. Once inside those markets, the focus shifts to delivering a better user experience through improved customer provisioning and onboarding.

In today’s software-driven reality, code is the key to differentiating hardware solutions. Hardware manufacturers find themselves at a critical juncture: either they get with the times and transform into a forward-thinking software business, or continue down their current path and face possible obsolescence. Assuming that not many businesses would choose the latter, the issue then becomes about choosing a best-of-breed, commercially available software monetization solution that makes the hardware-to-software transition both possible and painless. Businesses that take these measures are able to maximize the potential of their IP, while delivering the flexible packaging and pricing models that customers are demanding.

Ultimately, successful IoT monetization comes down to three main factors: highly flexible business models that align with customers’ evolving needs, easy licensing and entitlement management, and reduced hardware manufacturing testing and storage costs. Get those right and the IoT is your proverbial oyster!

For additional pearls of advice on why it pays to embrace new business models, read the full article.