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.
As the Internet of Things (IoT) continues to grow, the implications for business model innovation are huge. One of the major drivers in this connected landscape is the shift in end-user preferences: there is an increasing demand for flexible pricing models, ease of access to software upgrades, and a superior customer experience. As a result of the rise in connectivity, end users’ perception of value and what they are willing to pay for is changing drastically. Therefore, to take advantage of the IoT, independent software vendors and intelligent device manufacturers alike need to fundamentally rethink their orthodox attitudes towards value.
In Part 1 and Part 2 of this series, I looked at some of the key drivers of the IoT, its 10 main areas, the importance of ecosystems, and the 4 Values Framework. This framework is an effective way for large, established companies and emerging startups to evaluate how they can best monetize their IoT opportunities. I have already covered two of the framework’s four components: vertical integration and value creation, and in this article, I will talk about the remaining two: value migration and value delivery systems.
Today as more opportunities are created through IoT, we are seeing traditional hardware companies, whose intellectual property (IP) was the hardware that it manufactured, increasingly seeing the value in software and, in turn, changing their whole business and IP strategies to fit in with the new era. However, IP, hardware or software, is only as good as its protection and the business’ ability to successfully monetise it. Our recent research revealed that despite nearly nine out of 10 organisations admitting they are worried their software may become compromised, many are still not taking the threat seriously with over half (52%) leaving themselves vulnerable to IP theft by not using software IP protection tools.
Our most recent analysis of the software licensing and monetization market shows that some core value propositions endure even as the technology and its applications undergo significant evolution and change. Software licensing solutions were originally created with the goals of preventing piracy and protecting revenue of software products.
My previous article on monetizing IoT spoke about some of the key drivers of that space, the 10 main IoT areas, the importance of ecosystems, and other major considerations. In this follow-up article, I’ll focus on the 4 Values Framework that we’ve used to help several of our clients – both large, established companies and emerging startups – define their IoT strategies.
I recently published a whitepaper about software as a key enabler of improved business processes and increased customer satisfaction.
Software is not a new concept in embedded and hardware products. For years, devices have become increasingly intelligent, more programmable and more connected. What has changed today is that the trickle of product evolution has become a deluge of business revolution. Market-leading hardware manufacturers who have transformed into software businesses are finding the most success for themselves, while also driving success for their customers. As examples, General Electric has pivoted its business to the Industrial Internet, while Rockwell Automation has firmly positioned itself as the Connected Enterprise company. Cisco Systems’ Cisco ONE software program marks a decisive shift in how its portfolio is packaged and monetized.
I recently published a three-part article on SandHill.com, the first of which talks about building and monetizing an IoT-ready business in a new, disrupted world. I point out that while product innovation can drive significant growth in the IoT, more needs to be done to overcome fundamental business challenges such as monetizing distinctive value and maintaining a competitive advantage. In many cases, it is advisable to devote more resources to business model innovation than to pure product innovation, as it may have a greater impact on your profitability.
Nostradamus predicted a number of interesting trends for 2016, such as a single world language that many speculate will emerge from the Internet. It is surprising, then, that he did not foresee the accelerated pace of technological innovation and adoption we are currently witnessing. Had technology forecasting existed in the sixteenth century, he might have predicted the disruptive impact this would have on business today.
I feel very fortunate to have the opportunity to work with Viavi Solutions. It has been a pleasure to learn how Viavi deploys software monetization solutions to increase revenue, improve its customer experience, and strengthen relationships. Viavi leads with great products and has implemented operational efficiencies to respond to its customers’ needs more quickly. Several years ago, it was great if a company could master one of these areas, but today, cutting-edge companies like Viavi are leading in all three functions: customer intimacy, product leadership, and operational efficiency.