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Licensing Entitlement and Protection News You Can Use
Q1 2017
Servitization and the Rise of Value-Based Pricing & Sales Models
Servitization has been starting to make a lot of noise in the manufacturing world. According to the Advanced Service Group at Aston University, over the next couple years, 65% of the worldwide manufacturing industry will switch from a focus on products and production and begin to build their revenue streams through services.
LEARN MOREProduct News
In this version of LEAP, we are happy to announce 4 product releases: Sentinel RMS 9.1 for flexible cloud-connected software licensing; Sentinel EMS 4.1 for web-based software licensing and entitlement management; Sentinel Envelope for Linux on ARM; and Sentinel Envelope for National Instruments (NI) RTEXE which run on NI’s Linux real-time operating system.
GET THE FULL DETAILSSofting Industrial Automation Works with Gemalto Sentinel to Monetize the IoT
As part of its Internet of Things (IoT) activities, Softing sought to implement a proven protection and licensing solution to strengthen security, guard intellectual property, and monetize end-user software products. We spoke with Andreas Röck, Product Manager at Softing Industrial Automation about Softing’s license enablement, compliance and management transformation in the Industrial Internet of Things (IoT).
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Q1 2017
Servitization and the Rise of Value-Based Pricing & Sales Models
You may have heard all the chatter about Servitization. Not surprising; it’s become a popular subject in the manufacturing world.
The manufacturing industry is changing. According to the Advanced Service Group at Aston University, over the next couple years, 65% of the worldwide manufacturing industry will switch from a focus on products and production and begin to build their revenue streams through services. The group also identified that manufacturers offering advanced services to new and existing customers can create sustained annual business growth of 5-10%. In addition, the group reports customers of servitization are reducing costs by 25-30% and improving risk profiles and efficiencies around asset management.
With these kinds of results, it’s no wonder it’s become a popular subject.
What is Servitization and How Does It Work?
Servitization is the practice of providing intermediate and advanced services tied to physical products. It involves a shift from a one-time transactional hardware sale to a relationship-based service model where customers ‘pay-as-they-go’ based on the value or outcomes provided by manufacturers.
A well-known servitization example is Rolls-Royce, which offers gas turbine engine ‘power-by-the-hour.’ Basically, instead of purchasing the engines outright, their (airline) customers pay based on a fixed dollar per flying hour.
Similar to the Rolls-Royce example, GE’s jet engine group provides value to its customers by offering consumption or capacity-based pricing via a pounds-per-thrust model for its jet engines. Caterpillar offers its earth-moving equipment based on tons of earth moved, and farming equipment manufacturer, John Deere offers a service model based on number of acres plowed.
Selling Value and Charging for Outcomes
GE seems to have learned a thing or two about selling value over the years as it recently won its largest power plant software deal. An article outlining how GE creates and captures value for its customers, explains how the company closed the deal and provides a useful framework for selling value and charging for outcomes.
- Understand what drives value for customers
- Develop value models
- Understand and quantify the dollar value delivered
- To capture value, align the price with how the customer makes money
- (For the power plant software deal that might mean charging a monthly fee per megawatt of energy produced.)
An article outlining how GE creates and captures value for its customers, explains how the company closed the deal.
Q1 2017
Live Webinar! Licensing and New Pricing Models in the IoT featuring Softing Industrial Automation
Whether you are a device manufacturer or software developer, you probably realize that the Industrial IoT is revolutionizing the type of offering you bring to market. The advent of the IoT has given rise to new pricing and business models, however, their implementation is still in its infancy.
What stops you, as Industrial IoT vendors, from adding recurring revenue-based offerings to your product portfolio? How can you differentiate yourself when hardware is becoming commoditized and a lot of software is becoming open-source?
To get practical knowledge on how to innovate and go to market with different licensing and pricing strategies, please join our Ask the Experts webinar, featuring Dr. Christopher Anhalt, Business Development Manager at Softing Industrial Automation, and Jam Khan, VP Professional Services at Gemalto.
In this session, we will explore:
- Market drivers of innovative business models in the Industrial IoT
- Methods of implementing an innovative pricing strategy for Industrial IoT products
- Reasons for implementing the licensing technology for OPC products
- Challenges and opportunities of adopting software as a service business model for OPC products
The webinar will be held in English on March 22 at 12:00 EDT. A recording will be sent to all registrants. Click here to register!
Ask the Experts is a quarterly webcast series introducing new trends in the licensing, entitlement, and protection space. To access the previous session, click here.
Our Lunch & Learns
In today's on-demand and mobile world, everyone expects immediate gratification and 24/7 support. So when an end-user wants to make a purchase, they want to do it now. And after the purchase, they want instant access and availability. Most businesses are only just beginning to understand the full impact of what this on-demand world means to their packaging, pricing, promotion, delivery, and product support.
Register for this event and learn while enjoying a great lunch, from the experts at Gemalto, Simon-Kucher & Partners and Aria Systems about the concept of recurring revenue and how it impacts licensing and billing processes in the on-demand world.
If you want tips on how to better manage every customer interaction, from customer acquisition to recurring billing to customer care - this is the session for you.
Dates and Locations*
April 26th 11:30 AM – 2:00 PM – Denver, Co (venue – TBD)
May 17th 11:30 AM – 2:00 PM – Boston, MA (venue – TBD)
June 21st 11:30 AM – 2:00 PM – Chicago, IL (venue – TBD)
*Exact Q2 locations have not yet been determined. Please contact Marcy Clapp to book your spot and to be notified when venue details become available.
MD&M East Trade Show
If you are attending MD&M East, June 13-15 at Jacob K. Javits Convention Center in New York City, stop by and talk to us about how you can obtain usage data and also maximum licensing flexibility with Gemalto’s Software Monetization solutions.
Monetizing Innovation: How Smart Companies Design the Product Around Price
Smart companies today are spending more budget on the planning phases when creating products to better meet the needs of their target markets. As a result, they are seeing more success than those who are flying blindly, hoping someone wants to buy their product. And let’s face it – in this hyper competitive market, that key piece of the puzzle is critical. Gemalto offers four key elements of software monetization: packaging, control, management, and monitoring. Watch & listen to Madhavan Ramanujam, Partner at Simon-Kucher & Partners, monetization and pricing expert talk about the unique set of software monetization principles that help boost revenue and profits. Please click here to watch the recorded webinar.
