How Software LicenseManagement Can HelpIntelligent Device ManufacturersIncrease Both Profits andCompetitive Advantage

A discussion about using Software License Management solutions to help differentiate your products, reduce the grey market and

piracy problem, and create exciting new business models for your organization.

Written by:Jon Gillespie-Brown, CEO, Nalpeiron

Sources: IDC Research, Gartner Research, Software CEO and LinkedIn forums, Proformative, NetSuite, Sand Hill Group, Intacct

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This paper discusses using Software License Management solutions to help differentiate your products, reduce the grey market and piracy problem and create exciting new business models for your business.

Offer feature differentiation to control model variations through licensing. Lower costs and lower risk whilst creating much higher profit margins.

Your license management system can allow you to ‘segment’ your market and offer more or less security controls on products shipped to different regions or routes to market.

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Analytics, business intelligence and customer visibility are huge benefits of adding electronic licensing to your hardware based product set.

Nalpeiron has helped a broad range of intelligent device manufacturers and their related ecosystems, including names like Fujitsu, Spacelabs Healthcare, Inofile, Zebra and many more.

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cont

ents

• Usage based licenses, pay per use of features or functions, such as embedded fonts and tools

• Time based subscriptions, such as pay per year

• Capacity based and fixed time based licenses, such as use until a certain date until you renew

• Maintenance contracts can be automated, so software times out along with the contract

• Switch features or function on or off, such as feature upgrades and cross sells

• Trial and controlled pilot tests of your products - switching products off under your control

• Control model versions or release dates to differentiate an old model vs. a new one

This discussion paper highlights the real-world benefits of moving from the older hardware-only paradigm to a new flexible, profitable and cost-effective way to leverage software assets, enabling device manufacturers to increase both profits and competitive advantage.

Most device makers, whether it’s a printer or a medical

device, are creating software ecosystems around their

products and until recently these investments have

not been specifically targeted to drive new revenue

opportunities. However, forward thinking managers

and the recession have driven a more innovative mind

set in recent times and now software can be leveraged

to offer greater profits to the business as well as

competitive advantage.

Instead of fighting the competition based on

commoditized hardware offerings, you can now

innovate with the software component, allowing

you to find creative new ways to grow revenues and

increase your competitiveness.

Examples of new ways to leverage your hardware

products are to sell new business models instead

of being forced to accept only the “perpetual” once

shipped we have no control problem:

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Monetize your investment now

This paper discusses using Software License Management solutions to help differentiate your products, reduce

the grey market and piracy problem and create exciting new business models for your business.

Any manufacturer of hardware-based products that have a software component (including but not limited to

device manufacturers in printing, scanning, white goods, computer peripherals and medical devices, industrial

automation and CIM, telecommunications, electronic and test measurement device manufacturers) will benefits

from the information in this paper.

Monetize Your Investment in Hardware Related Software

“Software license management solutions offer you many more ideas on more profitable and customer friendly

ways to leverage your products in the market.”

Hardware becomes more like Software

Now hardware manufacturers can do the same thing. Instead of creating lots of hardware variations, you can reduce the

hardware and expensive related tooling, manufacturing and inventory costs by using the software that’s embedded or

associated with your hardware as the way to offer feature differentiation or to control model variations.

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For years software producers have offered “suite” type products with component parts that can be switched on or off based on the use of software licensing technology. Take Microsoft Windows as an example. You can download one trial product and then buy any of the versions based on the price you want to pay and the features you require – one binary file, features controlled by an activation process driven by preconfigured licensing parameters.

In addition, you can remove the older “trust based” paper mechanisms used to sell products, and leverage the controls and security of

license management tools to not only ensure your customers are paying for what they buy and remain within the license agreements

you have with them, but you can also easily analyze your customer base and report on the business in real time.

This means lower costs, lower risk and much better customer responsiveness – as well as much higher profit margins.

Remove Cumbersome Operational OverheadsOne of the key benefits of monetizing software is the use of automation. Instead of having to ship hardware each time you want to increase revenues, you can now simply ship a “product license code” via an automated commerce system. So you are creating and leveraging value based on “virtual” goods – the features and functions you enable are entirely controlled by electronic means.

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Grey market copycats and software pirates are pervasive and so you must also consider options to copy protect your software and make casual theft much harder. Again, a quality software

license management solution will assist in this regard.

Many embedded and similar devices already have firmware that controls the features offered to users. This configuration solution to device differentiation can be risky – oftentimes these can

be easily cloned and this allows users to upgrade their device to higher versions without paying – again using secure license controls can mitigate against this type of abuse. Good license

systems will allow you to activate and de-activate devices and move license controls using automated methods so that locking down your hardware need not inconvenience your users.

The final part of the equation you may want to consider protecting is your channel – if you sell into some parts of the world where contractual terms are abused or you have resellers selling

your products, added security controls can help you prevent both intentional and unintentional abuse. Your license management system can allow you to “segment” your market and offer

more or less security controls on products shipped to different regions or routes to market.

Trust Based Systems are no longer enoughAs stories like the lawsuit between Cisco and Huawei show, you need to protect and control your software based IP or the advantages associated with software can easily be lost.

This is also an important and intelligent way to help prevent industrial espionage where employees hand out valuable assets to

competitors and grey market manufacturers – without this knowledge and these tools the cheaper products are significantly less

valuable.

Licensing tools will allow you to also segment user bases and deliver certain functions associated with internal software to

different groups, or levels of trust. Internal staff may have one set of privileges while external resellers may have another for

example – all controlled electronically.

Use License Management to Control Non-Commercial Software TooMany device manufacturers have created tools and resources to manage and maintain their products; these are extremely value able assets that also need protection. Years of experience and intellectual property are often in the hands of resellers and employees, these assets can be controlled in the same way as the embedded software and be easily licensed to “internal” users with the same ease of use and automation for customers.

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Instead of shipping your products and wondering who owns them or how they are being used, you can now instrument them such that the licensing system will feed you back usage and

analytic data so that you can build better products, understand use cases and better market your customers.

By using license controls you can now automate product registration, maintenance intervals, customer updates and upgrades and access your end-user based, even when sold via the channel.

If you flag the features and functions in your products for selling various different product variations, you can also collect the data associated with those flags and get useful reports on how

your products are being used.

This level of understanding of the market gives you competitive advantage and can also help you create new products, save wasted development resources and give your real world data to

base decisions upon. This change is like “night and day” over the way most device manufacturers operate today who with little to no business intelligence.

Leverage the Power of Business InformationAnalytics, business intelligence and customer visibility are huge benefits of adding electronic licensing to your hardware based product set.

Nalpeiron’s cloud-based licensing infrastructure will enable hardware device manufacturers to easily and quickly “unlock” the power of the embedded or associated Software.

By leveraging the Software component of your offering you can offer a wider and more competitive set of options to your customers, along with being able to easily do this using modern web-

based controls through a partner like Nalpeiron.

Instead of fixed pricing models and inflexible go-to market strategies of the past, you can use the power of the Nalpeiron Licensing Service to offer what your users want when they want it - all

through a simple, fast to implement and cost effective hosted licensing service.

By controlling and managing the software component of your products you can also reduce and streamline your manufacturing costs and processes.

As you will know, moving “value” from hardware to software is not without its risks, so you also have to “protect” your IP and investment in the software along with being able to quickly

leverage the power it brings to your product offering.

How Can the Nalpeiron Hosted License Management Solution Help You?Using the power and simplicity of the Nalpeiron Licensing Service, you can make a hardware device behave like software, easily increasing functionality, flexibility and utility and therefore increasing the associated value to the end customer.

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The Nalpeiron Software Licensing Service will enable you to...• Use the power and flexibility of software licensing management to control your product offering in the market

• Open up new business models and ways to monetize your products, such as metered, prepaid, subscription and usage-based - all electronically

• Protect your software IP and prevent grey market abuse and piracy

• Easily “activate” your hardware devices and control their functionality from one central cloud-based service

• Enable users to easily pay and “unlock” features and functions with a single click, without shipping any new hardware or software

• Control and manage device lifecycle processes for customers and channel partners

• Use web-based dashboards to gain insight into your business, channel and customer usage as well as easily printing detailed business information reports and charts

• Automate all these processes from your central systems, allowing your sales and support teams to reduce waste and increase revenues

Quick Use Cases

Spacelabs Healthcare: Medical devices and associated software protected and managed by Nalpeiron technology.

Crosshairs Embedded: Software tools for embedded devices licensed and controlled by Nalpeiron technology.

Zebra: Commercial printer software and fonts plus engineers tools developed by and managed with Nalpeiron technology.

Inofile: Printer and scanner software plug-ins for medical records licensed and controlled by Nalpeiron technology.

Nalpeiron has helped a broad range of intelligent device manufacturers (these often include printers, scanners, computer peripherals and medical devices, industrial automation and CIM, and telecommunications, electronic and test measurement device manufacturers) and their related ecosystems, including names like Fujitsu, Spacelabs Healthcare, Inofile, Zebra and many more.

Want to know more?Don’t hesitate. Get in touch...

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www.nalpeiron.com

+1-650-799-3479 (Canada/World) +44-207-788-7843 (EMEA) +1-650-352-9046 (Fax)

The Nalpeiron Software Licensing Service™ is a comprehensive platform that enables software publishers to create a range of flexible ways

to sell and market their software, with coverage for all the major platforms and the ability to choose whether to deploy software licensing

infrastructure in the cloud or on-premise. Nalpeiron is one of the strongest and most robust complete solutions on the market that supports

millions of end users with strong but friendly ways to monetize your software.

What is the Nalpeiron Software Licensing Service?

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