W H I T E PA P E R

Electronic Test and Measurement: Creating New Value, and Revenue Streams, with Embedded Software

Electronic Test and Measurement: Creat ing New Value, and Revenue Streams, wit h Embedded Software

Electronic Test and Measurement: Creating New Value, and Revenue Streams, with Embedded Software
Introduction
More than ever, embedded software is playing a central role in intelligent device manufacturers go-to-market strategies. This trend is especially apparent in markets such as telecom, test and measurement, healthcare, and industrial automation where manufacturers are under increasing pressure to innovate, rapidly enter new markets, control costs, maximize incremental revenue from existing customers, and deliver a competitively differentiated customer experience. As embedded software has become more integral to their business, more and more manufacturers are discovering the power of software licensing. With licensing, manufacturers can turn device features and/or capacity on and off as appropriate. This allows them to charge customers for the capabilities they want, while not charging them for capabilities they dont want. Licensing thus enables manufacturers to more effectively use embedded software as a means of managing and monetizing the features and functionality they provide in their devices. By adopting the right licensing models, test and measurement manufacturers 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. reate innovative products on existing hardware C chassis. This reduces the cost and time it takes to bring differentiated products to new or existing markets. p-sell existing customers by simply activating U additional device capabilities or capacity. This makes it easier to capitalize on incremental revenue opportunities. eet evolving customer needs without requiring them M to swap out hardware or otherwise disrupt their operations. This makes for a more positive ongoing customer experience.
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These examples highlight why software licensing is such a compelling best practice for intelligent device manufacturers. In fact, in todays highly competitive and fast-moving markets, the skill with which manufacturers structure the licensing of their embedded software and the diligence with which they manage their customers entitlements may well turn out to be what separates market leaders from other players. Today, manufacturers are applying software-based licensing principles to manage a wide range of functions in hardware ranging from medical devices and location intelligence equipment, to devices used in telecommunications, supply chain automation, automobiles, test and measurement, and storage management. This whitepaper outlines key trends and opportunities influencing intelligent device manufacturers today, and how FlexNet Producer Suite for Intelligent Device Manufacturers can help these companies to fundamentally improve their business. In addition, the whitepaper illustrates the power of licensing-based solutions with a customer implementation scenario.

Trends and Opportunities in Electronic Test and Measurement

At a macro level, complementary business issues are driving the software-based differentiation of intelligent devicesall of which can be capitalized upon with embedded software licensing and entitlement management solutions: hanging economics of intelligent device manufacturing: C The underlying hardware and core operating system software in many devices is being commoditized, as manufacturers seek to gain economies of scale by using more standardized components. Intelligent device manufacturers are increasingly buying, versus building, core subsystems and system software. As a result, their role is evolving to more of an integrator, and less of a manufacturer. Manufacturers seek better
Flexera Software: FlexNet Producer Suite Whitepaper Series

Electronic Test and Measurement: Creat ing New Value, and Revenue Streams, wit h Embedded Software

ways to differentiate themselves; software is a key means to creating competitive advantage and driving incremental revenue. rowing revenue contribution from software: As a G corollary to the commoditization of hardware, many intelligent device manufacturers are focusing more resources on software development. As such, software enables new revenue sources and provides a way to deliver a superior, differentiated customer experience. oftware-enabled supply chain transformation: With S the underlying hardware becoming more powerful and at the same time commoditized, manufacturers can now build fewer base configurations and deliver more functions. Product capabilities, capacity, versions and price points can be created and modified based on functions that can be turned on and off by licensing of the embedded software. This dramatically streamlines the supply chain and manufacturing processes, as well as lowering inventory carrying costs. The challenge for the intelligent device manufacturer is to quickly bring to market devices that are tailored to meet the unique needs of a particular segment or new market, while keeping manufacturing costs low to meet margin requirements. Licensing-based approaches allow intelligent device manufacturers to enter new markets with a full-function device, and then create lower price points with the same device by enabling a subset of capabilities/capacity if lower-priced competition enters the market. rand and revenue erosion from grey market abuse: B As underlying device configurations become more standardized, grey market theft can be perpetrated more easily. For example, demonstration models of products increasingly find their way into the grey market via channels for selling used equipment. These devices are running improper software and typically do not function correctly, posing a serious threat to the customer experience. In addition, grey market sales jeopardize maintenance revenues, as manufacturers lose track of device ownership and thus the maintenance relationship. ustomer preferences: In todays ultra-competitive C business environment, customers are demanding more flexible pricing models, easy access to upgrade features, and a superior customer experience. Embedded software licensing capabilities allow manufacturers to meet all of these customer requirements by enabling important capabilities such as field upgrades and a consistent, streamlined customer experience across products.

Turning to Flexera Software for Answers

As electronic test and measurement manufacturers address these trends, they increasingly recognize that they face similar issues as software companies. Todays intelligent device manufacturers are looking to Flexera Software to help them: each new markets by creatively packaging and R pricing embedded software uild revenues by better monetizing capability B and capacity ut manufacturing costs by using software to C differentiate capabilities on devices, and thus reduce the number of unique SKUs ccurately track customer entitlements and usage A rack channel partner activity, and maximize service T and maintenance revenues revent unauthorized use of capabilities without cutting P off legitimate customers educe the operational costs associated with shipping R software upgrades ut customer support costs by offering customers and C channel partners self-service and keeping them current on the latest version ake better development and marketing decisions M based on device usage data

FlexNet Producer Suite Addresses Intelligent Device Manufacturers Unique Needs

FlexNet Producer Suite for Intelligent Device Manufacturers leverages Flexera Softwares 25 years of industry experience, helping to maximize revenue, cut costs, and eliminate manual processes. It has numerous features that have been optimized for intelligent device manufacturers, including: mall footprint, embedded client: offers a licensing S toolkit that is highly modular, supports several license models, and has a very small footprint (under 50K). This allows intelligent device manufacturers to keep costs low by using licensing of the embedded software to configure capabilities and capacity on a device while producing a minimum number of device types (SKUs). igh configurability: allows key elements such as H security and binding to be configured or replaced as needed. This provides additional flexibility to fine-tune the solution to meet exact requirements or take advantage of existing device capabilities, while keeping the footprint small. ands-free activation and silent trials: provides hands-free H activation and silent trials that dont require registration. This transparent in-product activation improves the customer experience and increases upgrades/up-selling by enabling easy trials for new capabilities.
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Flexera Software: FlexNet Producer Suite Whitepaper Series

Electronic Test and Measurement: Creat ing New Value, and Revenue Streams, wit h Embedded Software

icensing and entitlement management from end to L end: provides a single view for you, your customers and your channel partners to view and manage embedded software on devices and enables you to electronically turn on and off functionality.

network management product. Model A is the low-end enterprise device and Model B is the high-end device for service providers. Model A contained all of the components necessary to deliver Model B capabilities; Model B is created by invoking different configuration parameters. The network test equipment manufacturers previous manufacturing methods created fluctuating shortages of one model and excess inventory of the other. The FlexNet Producer Suite allows the company to assign variable license certificates (Model A or Model B, plus multiple variations within each) during the manufacturing process. The device is shipped to a customer with product configuration instructions embedded in the electronic certificate. When the network management device is powered on and initialized, it self-configures. FlexNet Producer Suite allows the network test manufacturer to achieve major new efficiencies in manufacturing and inventory. It has effectively helped them reduce the manufacturing and inventory carrying costs by half. Creating a diverse product line to meet customer needs The Flexera Software licensing and entitlement management solution has allowed the network test equipment manufacturer to introduce new product capabilities to reach new market segments. These capabilities, which are all executed via electronic licensing, include: rial usage, providing full-product capability for a fixed T period of time ifferent device configurations for a variety of uses D within the two distinct markets ixed amounts of use beyond a trial period but not F in perpetuity With FlexNet Producer Suite, the network test company is achieving the goal of mass customization, a manufacturing theory that allows a mass-produced product to be tailored to meet every customers specific needs. As a result, Flexera Software allows an international brand to maintain its elite reputation while evolving to a broader scope and a new enterprise customer base, without the investment of re-branding. Field upgradeability reduces risk and increases revenues Before deploying FlexNet Producer Suite, the network test equipment manufacturers equipment could only be upgraded on-site or at two service locations, which presented numerous challenges including: he cost of deploying field service representatives to T perform the upgrades he customers downtime when equipment was being T shipped and serviced

Case Study: The FlexNet Producer Suite Helps a Global Network Test Equipment Manufacturer Reach New Customers and Achieve Operating Efficiencies

A global network test equipment manufacturer recently looked to Flexera Software for an electronic licensing solution to cost-effectively differentiate its high-end products, directed at a telecommunications service provider audience, and penetrate a new, lower-end enterprise market. Flexera Softwares FlexNet Producer Suite for Intelligent Device Manufacturers helped the network test equipment manufacturer achieve these goals, and more. Through the FlexNet Producer Suite the company has: ignificantly lowered its manufacturing and inventory S carrying charges nabled field upgradeability of the entry-level product E onetized its maintenance program M ore effectively enabled dealer demonstration devices M Flexera Software FlexNet Producer Suite enables product differentiation An internationally known brand, the network test equipment manufacturer needed to reach a broader client base. The company wanted to take advantage of its well-established reputation on the high end of the network monitoring and diagnostic market, and offer a range of products to address the needs of both service providers and enterprises. Because its products are used on networks that have Internet connectivity, the network test equipment manufacturer took advantage of this fact to deploy the FlexNet Producer Suite to offer different product configurations, manage entitlements and offer self-service to dealers and customers. FlexNet licensing was used to build a management console that enables device capabilities based on entitlement. The console communicates with the entitlement management system over an Internet connection. Rounding out the solution, licensing technology was embedded in the network management devices firmware, to enforce and monitor each devices configuration upon registration by the customer. After registration, customers could execute upgrades and renew maintenance remotely. Flexera Software reduces manufacturing and inventory costs by half Prior to adopting the Flexera Software licensing and entitlement management solution, the network test equipment manufacturer used traditional manufacturing methods to mass-produce a fixed number of two variations of its core
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Flexera Software: FlexNet Producer Suite Whitepaper Series

Electronic Test and Measurement: Creat ing New Value, and Revenue Streams, wit h Embedded Software

he risk of damage to improperly packed T inbound devices he cost of international shipping and customs fees T ost revenues for the network test equipment L manufacturer, due to a painful upgrade process Now, through FlexNet Producer Suite, upgrades can be easily executed by the customer, on-site: he customer purchases an upgrade and then connects T over the Internet to the entitlement management system at headquarters new entitlement is then downloaded to the device in A effect, upgrading the license hen the device is re-booted and re-initialized, it W recognizes the new configuration parameters and the upgrade is complete By reducing customer barriers to upgrades, the FlexNet Producer Suite also allows the network test equipment manufacturer to more fully monetize equipment maintenance, which was previously sold on an as-needed, ad hoc basis. Now, via the Internet, valuable new enhancements can easily be delivered. Enhancing dealership relationships with high-performance floor models The network test equipment manufacturer is additionally leveraging licensing technology to deliver demonstration models to dealers that are specifically configured to meet their needs. Before adopting FlexNet Producer Suite, the network test equipment manufacturer had two problems: irst, they had demonstration models, which are F provided at a discount, being sold on the grey market econd, if they sent demo devices that were not viable S for resale, they were not properly showcasing the network management equipments capabilities Using the FlexNet Producer Suite, Model A and Model B demonstration test equipment can be configured specifically for demonstration purposes, which provides full capabilities, but disables an important one the ability to save network data. Without data-save capabilities, any potential resale value or unauthorized use vanishes. As this global network test equipment manufacturer leverages Flexera Software licensing and entitlement management solutions to improve numerous aspects of its business, the power of FlexNet Producer Suite is clear: Flexera Software enables electronic test and measurement manufacturers to increase profit margins while reducing manufacturing and operations costs.

Summary

Electronic test and measurement manufacturers are increasingly shifting to a technology and business model that emphasizes value delivery through embedded software. Flexera Softwares FlexNet Producer Suite is the industryleading licensing and entitlement management solution for intelligent device manufacturers - unlocking revenue of embedded software and reducing operational costs while streamlining manufacturing processes. FlexNet Producer Suite also delivers unified entitlement management in both on-demand and on-premise options. As competition intensifies in todays global market, maximizing customer satisfaction, building revenues and reducing costs remain top business imperatives. FlexNet Producer Suite for Intelligent Device Manufacturers allows companies to: enetrate new markets through cost-effective, softwareP driven product differentiation mprove customer satisfaction by offering self-service I and a consistent experience for downloading, using and upgrading products educe the number of SKUs that must be manufactured, R carried and supported nable electronic upgrades E ully monetize maintenance programs with better F tracking of channel and end-customer entitlements llow new up-sell capabilities to be sampled and A activated in the field

About Flexera Software

Flexera Software is the leading provider of strategic solutions for Application Usage Management; solutions delivering continuous compliance, optimized usage and maximized value to application producers and their customers. Flexera Software is trusted by more than 80,000 customers that depend on our comprehensive solutionsfrom installation and licensing, entitlement and compliance management to application readiness and enterprise license optimization - to strategically manage application usage and achieve breakthrough results realized only through the systems-level approach we provide. Flexera Software is a privately-held company and an investment of private equity firm Thoma Bravo, LLC. For more information, please go to: www.flexerasoftware.com

You can learn more about this solution, download datasheets, and watch Webinars by visiting:
www.flexerasoftware.com/measurement

Flexera Software: FlexNet Producer Suite Whitepaper Series

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