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Internet of things: Opportunities for intelligent device manufacturers

Posted: 25 Jun 2012     Print Version  Bookmark and Share

Keywords:Internet of Things  Internet Protocol  Machine-to-Machine 

This is an important benefit of Internet-connected devices. Instead, the manufacturer designs the embedded license rights to be updateable, providing a mechanism (such as an application that runs on the host system) that enables the customer to purchase an upgrade code that unlocks the additional tier of functionality for that device. In the previous example, an internet-connected version of the two-core chip configuration could be upgraded to the four-core chip configuration.

This type of embedded licensing model has been successfully used in many devices – mobile phones with unlockable GPS functionality, routers sold in tiers based on number of supported ports, and cameras with different signal-processing algorithms based on available licenses.

Creating Internet-connected smart devices offers many benefits, including:

1. Product life extension. It extends the life of the manufactured device. Much of the functionality of devices is managed and controlled using embedded software, instead of being hard-coded into the device's physical components. As a result, product upgrades and enhancements can be delivered using software commands communicated to the device over the internet.

This enables the customer to derive more value from the device over a longer period of time with minimal disruption. It's good for the manufacturer too because it offers more up-sell opportunities for new functionality at minimal expense and effort. Finally, it's good for the environment, as less physical machinery needs to be manufactured and disposed.

2. Automated support. The Internet of Things provides enhanced support experience to customers, at significantly reduced costs to device manufacturers. Manufactured goods have the ability to monitor operations and report back malfunctions and their causes –drastically streamlining the troubleshooting process. Potential problems get flagged by monitoring for trouble signs and patterns, and then resolved by the system by anticipating malfunctions before they actually occur and suggesting preventative remedies. Many of these problems are addressable remotely through software commands, fixes and upgrades, thus eliminating the need to send personnel onsite to fix the problem.

3. Reduced manufacturing and distribution costs. Internet-connected devices controlled by embedded software significantly reduce manufacturing costs. Companies reduce the number of models they must manufacture by controlling features, capacity, configurations and throughput via software and software entitlements – allowing them to build once and "package" functionality in any number of formats. Configuration of the products can be postponed until the exact requirements of the customer are determined. This manufacturing flexibility means that producers, distributors, and resellers require fewer inventories – greatly streamlining the supply chain.

4. New markets & revenue streams. The Internet of Things enables the creation of entirely new revenue streams as well as opportunities to grow the customer base. 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. There are opportunities to charge for new levels of software support while simultaneously delivering a better customer experience.

And because embedded 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 that would previously have been impractical or prohibitive due to costs. The additional data generated by intelligent, connected devices can also be turned into intelligence and used to identify new potential markets and opportunities.

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