Monetize the IOT

Jam Khan

Vice President Business Development and Professional Services

Bringing ROI and IP Protection to the IOT

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Connectivity Everywhere

Business Model ChallengesProvisioning | Tracking | Entitlements

Licensing | Usage Measurement

The Cloud is changing the way companiesdistribute and provision their products and services.

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Monetization Opportunities

EcosystemMonetization

ServicesMonetization

DataMonetization

DeviceMonetizationB

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IoT

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Monetization ComplexityBasic Advanced

Types of IOT Monetization ModelsCompanies can select one or moremonetization models to match level ofIoT maturity, business needs and thetype of customer relationship.

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Device MonetizationFocus on the value of the software not the hardware

How It WorksCompanies are emphasizing the value of the features on the device, not the hardware device itself.Hardware is increasingly commoditized.

EcosystemMonetization

ServicesMonetization

DataMonetization

DeviceMonetization

Monetization ComplexityBasic Advanced

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IoT

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Devices and IoT Market Trends

Hardware becoming a commodity

Growing revenue contribution from SW

USP of hardware depends on software

SW-enabled supply chain transformation

Revenue erosion from grey market abuse

Customer preferences are changing

New business models are evolving

Multiple vendors equip single systems

New use cases and services are evolving

IoT leaves the safety of closed systems

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Everything is Software

Jeffrey ImmeltChief Executive OfficerGeneral Electric

“The notion that there is huge differencebetween the industrial world and the softwareworld is no longer valid….those days are over.In today’s world, everything is software”

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The Shift in Business ModelsCustomers expect to only consume (and pay) for what they need

Perpetual Conventional method. Dominated market in the

past. No longer effective.

Subscription Usage Based Growing consumer demand. Requires cloud billing and

usage feeds.

Pay-Per-Month/Year. Attractive model with no

up-front investment.

Perpetual pricing has dominated much of the software space in the past. Now there is a clear shift towards subscription and usage based licensing

Selling the next device

Potentially includes commodity advantages, IP ownership and brand

Business model relies on customer loyalty

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Value Capture

Revenue is not limited to physical product sales

Other revenue streams become possible after the initial product sale

Team up with partners: understand how other ecosystem players make money

Traditional Value Capture IoT-based Value Capture

$

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Business Model VersatilityOrganizations need to be nimble, flexible, and adapt to a constantly changing environment

The management of many productfeatures and platform variations is crucialto gaining competitive advantage andachieving business success.

TailorOffering

ReduceCosts

IncreaseFlexibility

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Control The Software ExperienceActive and update licenses throughout the product lifecycle

License Activation

Supports activation at production, during fulfilment,

and field activation

LicenseUpdates

Send new licences or updates to devices in the field

License Control& ManagementSupports device personalization per channel or end user

Production ControlEnable to control low-trust contract manufacturers and still allow them to produce offline.

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Customer ExpectationsDeploy a wide range of licensing models to cover all your business needs, now and in the future.

Feature Based LicensingDefine license terms for specific features and application modules within a single application.

Version ControlControl how and when customers get software updates and features.

Offline LicensingEnable check-out of floating licenses for offline use for remote users..

Time Based Licensing Deliver time based licenses including perpetual, pay per use and limited duration.

Custom License ModelsCustomize models with precise licensing attributes to meet business goals and customer needs.

User Based LicenseLicenses do not have to be tied to a device, user centric licenses follow a user.

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Device Vendor Benefits

Flexible LicenseModels

Seamless UserExperience

ScalableLicensing

ExtendablePlatform

Deploy a wide range of licensing models for all your business needs, now and in the future.

Implement a licensing system that scales as your business grows.

Manage and Control Your Product Behavior from the Back Office

Deliver an intuitive and consistent user experience for any type of licensing model and deployment.

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Manage the Software Lifecycle

LicensingEnforcement

Electronic SoftwareDistribution

System Integration

LicensingManagement

CustomerWeb Portal

ERP

CRM

MES

1 2 3 4

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Recommended Licensing MethodologyUtilize a proven licensing methodology to reduce development effort and ensure fast-time-to-market.

Protect &Release

ProductDevelopment

CreateBinary File

Protect products from illegal copies, reverse engineering and code tampering.

PROTECT ONCEA

Adjust your license security policy for different customers, market verticals and regions.

EVOLVE OFTENC

BusinessRequirements

DELIVER MANYBDeliver the same software package to individual users or across thousands of enterprise domain users.

TrackUsage

ManageEntitlements

SelectProtection Type

SelectLicense Model

Define ProductCatalog

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Organizational CoordinationSoftware Monetization Involves All Organizational Business Units, Processes and Information Systems

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InformationTechnology

OrderFulfillment

Marketing& Sales

Research & Development

ProductManagement

CustomerSupport

FinanceDepartment

OrganizationSystems, Processes

Business units need to adopt adequate processes, tools and methods to generate recurring sales

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Security &Protection

UsageTracking Data

EntitlementManagement

ProductPackaging

Digital Product/Service

Software Monetization

Digital Business Architecture

Digital Product / Service

CRMSystem

Marketing Automation

Customer Interaction

CRM

Online Purchasing App

BillingSystem

PaymentMethods

e-Commerce

Rolls-Royce: Power-by-the-Hour

Rolls-Royce’s Value Creation:

‒ Outcome-based business model offering functionality rather than spare parts to ensure engine reliability.

Rolls-Royce’s Value Capture:

‒ Charge for a complete engine and accessory replacement service on a fixed-cost-per-flying-hour basis.

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SUMMARY Market Evolution

– The market is changing and has a considerable impact on the way companies do business.

Impact on Device Vendors– Device vendors need to leverage software

and adapt to the IoT revolution.

New Business Opportunities– Device vendors need to focus on new

ways to create and capture value.

– Sentinel solutions enable device vendors to create new business opportunities.

QUESTIONS & ANSWERS