IT market research agency Gartner has shared 5 tips to monetize from Internet of Things.
Simplify, differentiate, drive revenue, grow market and protect your IP are the five tips that can assist you to monetize from M2M initiatives.
You need to build a single device model that contains all capabilities and capacity then use licensing and entitlement management to configure.
You can drive more value from your device with software and monetize all aspects of your solution, Gartner said.
Device + software + licensing will assist to drive new, recurring revenue streams.
Move into new markets quickly by slicing and dicing your product by features, capacity and more.
Protect your IP
You can protect your devices and applications against IP theft with licensing.
Gartner said that manufacturers will have to reinvent their business models to profit from the Internet of Things.
Monetizing the software powering Internet-connected devices via licensing and entitlement management is key.
Gartner warned that simply selling more device units will not result in the massive spike in profits manufacturers are hoping for as they make a play to compete in the Internet of Things (IoT).
In addition to selling more Internet-connected devices, businesses will have to figure out how to make money from the software they develop that flexibly configures their devices and powers functionality — and they’ll also have to leverage software licensing and entitlement management as the mechanism to capture those additional revenues.
Mathieu Baissac, a software licensing expert on the IoT at Flexera Software, said: “By unlocking the value of that software through licensing and entitlement management — manufacturers can simultaneously generate significant new value for their customers and higher revenue for the company, all while lowering manufacturing costs.”
The key to monetizing the IoT is to use licensing to turn on and off features and capacity in different combinations to create additional value in the devices themselves and in the software that runs on top of them.
For instance, device makers could provide different product tiers — e.g. basic, premium and platinum — using licensing to unlock the appropriate features — without having to manufacture separate models. They could then upsell customers later by leveraging software-driven control of the device and licensing to make it easy for customers to upgrade to more expensive models.
Device manufacturers can use different licensing models — like metered or pay per use — to create demand from new types of customers or in new markets.
For example, a small community hospital previously unable to afford a million-dollar MRI machine might be able to acquire one using a pay-per-scan licensing model.
By using licensing and entitlement management to monetize the IoT, device manufacturers also open up new hardware- and software-related revenue by making it easier to sell new products and services to existing customers on a regular basis, and upsell them as new product features and software versions are released.