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Survey finds companies failing to profit from intelligent devices
Many hardware manufacturers are currently developing software applications for their products - transforming them into "intelligent devices." But the majority of manufacturers still do not understand the new revenue opportunities available to them by leveraging the power of their smart devices and the software that runs on top of them. “They are leaving money on the table,” according to analyst Mathieu Baissac of Flexera Software. And that is the key finding from a new Flexera Software Application Usage Management Survey prepared jointly with IDC, which surveyed more than 750 respondents from application producers and end-user enterprises, including over 125 device manufacturers, on all aspects of managing the software license lifecycle. According to the survey 87% of survey
respondents indicated they either already have "gone intelligent" by integrating software with their hardware products - or they plan on doing so within the next 12-24 months. However, device manufacturers also said their biggest concerns today centred around agility, costs and margins. 48% said that a major concern was reducing time to market for creating new products. 38% said enhancing their ability to react quickly to changing market needs and/or new market opportunities are paramount among their major challenges. Reducing time to market for creating product enhancements (37%), reducing manufacturing costs (36%), and low margins (23%) also topped manufacturers' lists of concerns. “These responses show that most intelligent device manufacturers still have not fully embraced the power of their software (imbedded or external) and software licensing to increase flexibility, reduce manufacturing costs, and uncover new revenue streams through development of more strategic solutions, “ explained Baissac. “With licensing, manufacturers can turn device features and/or capacity on and off as appropriate, allowing them to charge customers for capabilities they want, while not charging for capabilities they don’t. Licensing thus enables manufacturers to more effectively use software as a means of managing and monetizing features and functionality. “ According to the research by adopting the right licensing models for the their device applications, producers can: • Produce different products on the same hardware chassis. This drives down costs by eliminating the need for additional production lines and minimizing the number of SKUs that have to be kept in inventory.
4 February 2014 • Create innovative products on existing
hardware chassis. This reduces the cost and time it takes to bring differentiated products to new or existing markets. • Up-sell existing customers by simply activating additional device capabilities or capacity. This makes it easier to capitalize on incremental revenue opportunities. • Meet evolving customer needs without requiring them to swap out hardware or otherwise disrupt their operations. This makes for a more positive ongoing customer experience.
Leaving money on the table While some device makers are already breaking ahead of their competition by tapping into new revenue streams from their combined hardware/software solutions – according to the survey, most are leaving money on the table. 58% or
manufacturers are applying software- based licensing principles to hardware to control and manage a wide range of functions.
Examples include:
• Building management, as the green building movement drives the development of sophisticated systems to control heating, ventilation, air conditioning (HVAC) and lighting. • Machine-to-machine (M2M) communications between connected devices are unleashing a wave of new productivity such as improved asset management and new service initiatives. Manufacturers seeking to leverage M2M for their Internet-Connected devices and monetise new capabilities will need to leverage software enabled devices controlled through flexible software licensing.
• Mobile-device control running on tablets or smart-phones, allowing floor managers to move about the facility while monitoring operations in real-time. “In order to reap the full value of the software developed for their intelligent devices, manufacturers must adopt a software
licensing and entitlement management system,” suggests Baissac. “Whether they
develop this in-house or acquire a third party solution, the system should have the following capabilities:
High configurability: This allows key elements
respondents indicated that they do not currently monetise the software for their devices. According to Baissac, “It is clear that device manufacturers are moving to the intelligent device model to be more agile. But most device manufacturers are still early on in the maturity level when it comes to monetising their software applications. But there are concrete steps they can take today to substantially grow their revenues, increase competitive differentiation and solve more strategic problems for their customers. To do so, they will need to employ flexible licensing and entitlement management to monetise their software in solutions that combine software and hardware.” Best-in-class companies are doing this now – delivering substantially more value to customers while increasing margins in an increasingly commoditised hardware environment. This is clear enough when one looks at the most ubiquitous intelligent devices in the consumer marketplace – smartphones and tablets. For example, manufacturers such as Apple and Microsoft monetise both the devices and the apps accessible via their app stores.
In a B to B context, device Components in Electronics
such as security and binding to be configured or replaced as needed, providing additional flexibility to fine-tune the device to meet exact requirements or take advantage of existing device capabilities, while keeping the footprint small.
Hands-free activation: Hands free that
don’t require registration improve the customer experience and increases upgrades/up-selling by enabling easy trials for new capabilities.
Licensing, entitlement management and delivery from end to end: Implementing an end-to-end solution provides a single view for device manufacturers, their customers and channel partners to view and manage software embedded on devices and enables them to electronically turn on and off functionality.” In conclusion the report says as competition intensifies in the global market, maximising customer satisfaction, increasing revenues and reducing costs will remain top business imperatives. Adopting a software model controlled by flexible licensing and entitlement management is set to emerge as the path forward empowering intelligent device manufacturers to better compete.
While the base materials are rubber and plastic, they can be combined and treated to create end products of widely varying flexibility and rigidity, transparency and opacity, according to the company. Objects can be printed in a range of colours and material strengths.
Acquisition: Charcroft Electronics has acquired Bowtech Electronics in a move that extends the company’s product linecard with frequency-control components, temperature sensors, antennae, elapsed time indicators, electrolytic tilt sensors and solenoids as well as DC and gear motors. Both Charcroft and Bowtech are CECC-approved and franchised distributors for Syfer Technology and Novacap. “Like many of Charcroft’s products, Bowtech’s components are used in specialist applications and need the support of a distributor able to offer very high levels of service on relatively low volumes of product,” explained Debbie Rowland, Charcroft’s sales manager.
www.cieonline.co.uk
Smartphone sales: More than one billion smartphones were shipped in 2013, with Samsung extending its lead as the world's biggest vendor. According to market research firm IDC 1.004 billion smartphones were shipped last year, representing an increase of 38.4 per cent on 2012. IDC said that it was the first time that more than one billion smartphone units were shipped in a
single year and they now account for well over 50 per cent of the 1.8 billion mobile phones sold last year.
Samsung accounted for 31.3 per cent of smartphone sales last year; Apple 15.3 per cent while China’s Huawei came a distant third with 4.9 per cent of total sales. LG and Lenovo round up the top five with sales of 4.8 per cent and 4.5 per cent respectively.
New clock modules:Aspen Electronics is stocking the CM55 and CM65 clock modules from DAPU Telecom. These highly accurate clock modules are suitable for LTE base stations and other applications that require high holdover. The modules can also replace atomic clocks in a range of high accuracy communications equipment applications. Both modules meet the LTE standard holdover requirement of ±1.5µs/24h. Internally, the modules use an algorithm optimised for the application and can output highly accurate frequency signals of 1pps with adjustable pulse width. The module program can also be remotely
upgraded with both the CM55 and CM65 types being able to provide outputs of TOD information, customised to suit specific requirements.
3D printing: The world's first multi-material full- colour 3D printer has been launched by Stratasys, the owner of the MakerBot range of printers. The $330,000 printer features "triple-jetting" technology that combines droplets of three base materials, reducing the need for separate print runs and painting.
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