One of the biggest challenges being faced by embedded device manufacturers is how to monetize the software component within their product offerings.
Historically, embedded end customers struggled with the idea that they were purchasing any ‘software’ when buying embedded equipment, even if it’s actually the embedded software that provides almost all of the great capability the end customer enjoys. They were simply buying a ‘box’ and that box did what they expected it to.
The international Embedded World conference, which took place at the end of February 2013 in Germany, provided a strong indication that the traditional embedded market is changing. One theme run like a red thread through the show activities of many exhibitors: software monetization.
What is the reason behind this new focus? Vendors no longer concentrate on hardware development only; instead, the application feature side comes to the fore. With devices becoming more intelligent and connected through the Internet, the software required to enable a single device as well as a combination of devices is becoming quite complex.. For example in the automation space “intelligence” is becoming even more important, as it is “connectivity”. Both requirements are currently driving the demand of embedded software. Considering the fact that there are many more devices out there than people, the market potential is huge.
In the last 10 years we have witnessed a shift from hardware-driven (60-70%) sales cycle where software was provided for free, to manufacturers seeking to leverage the software assets embedded within their devices in various ways, including monetization as well as using software to protect and control the feature set delivered to their customers.