American computer software company, Flexera Software and International Data Corporation’s (IDC) new survey report provides unique insights into how the device manufacturers are fueling the third industrial revolution using IoT, Software and Intelligent Devices.
The report indicates that device manufacturers are now emerging from a period of significant challenge – characterized by low margins, stiff competition and brittle manufacturing supply chains.
They are increasingly retooling their offerings to make them intelligent and Internet-connected, opening up new ways of creating value for their customers. They’re leveraging software-driven intelligent devices, Internet of Things devices and software licensing/entitlement management capabilities to transform their business models and monetize their innovations.
Some of the report’s findings are listed below:
- The Number of Internet of Things Makers Will More Than Double within Two Years: Only 30 percent of respondent device makers currently develop Internet of Things devices. But 34 percent more plan on doing so over the next two years.
- Software-enabled Intelligent Devices Continue Strong Growth: Today 50 percent of respondents say they develop intelligent devices. Another 21 percent plan on making their devices intelligent over the next two years.
- New Product/Services Categories Are Being Created: 79 percent of respondents say they are or plan on delivering remote monitoring and maintenance to their product/service mix; 66 percent will add Business Intelligence capabilities; 37 percent will improve their supply chains with new services, such as automatic replenishment of used goods.
- Software Licensing/Entitlement Management is Key to Monetizing the Internet of Things: 60 percent of device makers use software licensing and entitlement management systems to monetize their intelligent and Internet-connected devices, allowing them to develop new offerings that bundle hardware, services and/or consulting.
- Proportion of Revenues from Hardware Declining, Proportion from Services Rising: The number of device makers who say that 50 percent or more of revenues comes from hardware will decline by 5 percent over the next two years while the number of device makers who say that 50 percent or more of revenues comes from services will increase by 6 percent over the next two years.
Vikram Koka, Vice President of Intelligent Devices & Internet of Things at Flexera Software stated that the report supports a long-proven truism in the high-tech arena – that innovation, alone, isn’t sufficient to transform an industry. There must also be a practical means to monetize new technology in order to profit from it.
“Software- and Internet- enabled products are spawning a vast new category of products and services previously unimaginable. The data from today’s report shows that in conjunction with their new products and services, device makers are also beginning to transform their business models via flexible licensing and entitlement management – enabling them to turn their innovations into revenue,” he concluded.
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