Device manufacturers' 'Holy Trinity'
12/12/2012 12:06 PM EST
The Apple model
Revenue and profit are important to all organizations. It can sometimes be difficult for the creators of the intelligent device and apps to make money for their intellectual property. Again, using Apple as our illustration, revenue comes from both hardware sales (iPhones can be purchased online and in stores) and, increasingly so, from software - the apps purchased on iTunes. An ongoing relationship and revenue stream between the manufacturer and the customer is created as iTunes is the portal by which the app is licensed, delivered to the end user, and entitlements granted .
This sort of monetization requires flexible licensing and entitlement management - in Apple's case, that's iTunes. For other intelligent device manufacturers, this is accomplished through custom development - or more frequently nowadays - the purchase of a licensing and entitlement management solution that can be bolted on to the device's embedded software.
While Apple is the most familiar intelligent device maker, most manufacturing is heading in this direction. Intelligent devices are everywhere – cars, MRI machines, washing machines, gaming, the home.
As manufacturers start thinking and acting more like solutions providers, the new markets and revenue streams opening up to them are mind boggling. An office building that can be upgraded with the latest energy-saving power via the Internet. A washing machine that can sense a failing part and schedule maintenance before a breakdown occurs.
The emergence of the intelligent device is one of the most transformative trends since the advent of electricity. And it's the inevitable future for manufacturers who wish to remain competitive, innovative and deliver value to their customers.
-Vincent Smyth is general manager for Flexera Software’s EMEA unit.