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Manufacturing/Packaging  

How can IoT improve manufacturing?

Posted: 05 May 2015     Print Version  Bookmark and Share

Keywords:IoT  manufacturing  Internet of Things  automobile-as-a-service  Ford Sync 

New markets and revenue streams: Finally, the Internet of Things enables the creation of entirely new revenue streams as well as opportunities to grow the customer base. As illustrated in the Ford Sync example, using a software licensing model, manufacturers can easily offer product enhancements through software updates, and charge for the enhanced functionality based on a software maintenance and update model. Moreover, there are opportunities to charge for new levels of software support while simultaneously delivering a better customer experience. And because software allows for flexible product configurations—manufacturers can quickly, easily and inexpensively package and price their devices to uniquely address new, emerging or niche markets.

The software-centric business model

There are some key points device manufacturers should consider when making the leap to a software-centric model, including:

  • Securing business buy-in for the transformation—The effort is broader than just engineering or product management, and requires coordination among the groups.
  • Understanding the traditional software licensing methodology and its proven approaches that can be leveraged in the intelligent device context.
  • Determining the appropriate software licence compliance policies and enforcement mechanisms among a wide spectrum of options available, and anticipating the flexibility needed to make changes later as business conditions change.
  • Understanding the difference between delivering hardware and digital goods—the distribution mechanisms should be coordinated, but can be unique.
  • Understanding the software value lifecycle—as opposed to a one-off hardware transaction, it is an ongoing process, and is increasingly subscription based.
  • Creating business processes to support the value cycle of the software.
  • Implementing a customer self-service portal—it can reduce operational costs and increase customer acceptance of software.
  • Defining and executing a product management and go-to-market strategy
  • Implementing sales training and compensation policies—selling is not about selling numbers of hardware pieces, but about selling 'value.'
  • Continuously fine-tuning strategy for product development, delivery and execution to optimise revenue and margins.

However individual manufacturers implement these strategies, there is no doubt that the 'Internet of Things' represents a permanent transformation affecting every industry. The opportunities are staggering for device makers willing to make the transformation.

- Vikram Koka
  EE Times U.S./Vice President, Internet of Things
  Flexera Software


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