Software Monetization Featured Article

Medical Equipment Vendors Need an Embedded Software Monetization Strategy

May 29, 2017

Embedded software is becoming the bread and butter for many industries that were formerly hardware-centric. While hardware itself was once a competitive differentiator, that is simply no longer the case, and automation and the Internet of Things (IoT) are making embedded software the key intellectual property (IP) for many companies. For medical equipment manufacturers, monetizing that embedded software means changing they way they conduct business, which can be disruptive and challenging, but ultimately worthwhile.

Intelligent software embedded in medical devices offers a variety of benefits to equipment vendors, enabling them to better distinguish their offerings through advanced features and functionality. The use of embedded software constitutes major IP, which must be properly protected and monetized to prevent risk. An embedded software protection and monetization strategy can go a long way toward protecting IP and ensuring medical equipment vendors are gleaning the most value out of their offerings.

According to Gemalto, which specializes in software protection and monetization for medical equipment manufacturers as well as other vertical markets, there are four essential components to a comprehensive embedded device monetization strategy. The company has published a free whitepaper advocating for a shift in business practices and approach for these companies as they make the transition from a hardware-centric business model to one centered on software and value-added services.

Businesses should begin by controlling their valuable embedded software, ensuring it may not be tampered with. That means protecting against free usage or functionality through accessing and changing codes. Features-based licensing should also be employed to control how products are being used, which has the useful side effect of reducing the number of hardware SKUs required for management along with reducing the costs of tooling, manufacturing and operations.

Packing and pricing should also be optimized, and this is best accomplished through a process that can be scaled so pricing metrics may be applied to many products. Alternative revenue models like revenue sharing agreements and usage-based pricing should also be considered to better meet customers’ needs while also deriving the most value from products.

Another important component of an embedded monetization strategy for medical devices is management, and businesses need to ensure the systems for pricing, packaging, billing and managing devices easily work together. By providing automation, centralized management and end user enablement, customers are empowered to handle a variety of tasks themselves. These include license compliance reporting, device activation, upgrades, cancellations and renewals.

Usage tracking and reporting is the final component in a comprehensive embedded software monetization strategy. Automation is a great way to keep track of licensing details along with product usage and entitlement activations, all pared down based on features. This type of automated tracking is critical for proper monetization and also helps offer metrics about billing, sales and marketing, product packaging and training.

Medical equipment manufacturers need to protect their valuable IP as they make the transition from a hardware focus to software and services. A comprehensive embedded software monetization strategy offers protection and assurance along with maximum value to vendors, their partners and their customers.