Michael Gaudlitz

Regional Sales Manager IoT/Embedded

New Business Opportunities:Flexible Licensing Models in the Internet of Things

Tel: +49 89 894 221-191

Mob: +49 175 7272 455

Michael.Gaudlitz@gemalto.com21. Juni 2016

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The Internet

of Things

CONNECTIVITY

REAL-TIMEDATA

Technology EvolutionThe evolution of technology is driving the Internet of Things forward at a fast pace to make it a reality.

INTELLIGENTDEVICES

SOFTWARE

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Key Motivations and Enablers

TECHNOLOGYDEVELOPMENTS

Embrace new technologies to

advance your competitors

CHANGINGAPPLICATIONS

Anticipate changes in user

demands

BUSINESSDYNAMICS

Support new revenue stream

opportunities and business models.

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Software is the Enabler for IoT

CLOUD SERVICES

END USERAPPLICATIONS

DEVICES

COMMUNICATION

DATA

SOFTWARE

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Industry Trends

Jeffrey ImmeltChief Executive OfficerGeneral Electric

“The notion that there is huge differencebetween the industrial world and the softwareworld is no longer valid….those days are over.In today’s world, everything is software”

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Traditional and IoT-based ValueAs the Internet of Things spreads, the implication for business model innovation is huge.

To take advantage of IoT, device vendors need to fundamentally rethink conventional views and methods about value.

Value CreationIncreases the value of company’s offering

and encourages “willingness to pay”.

Value CaptureIoT creates a new mindset with focus on how to make money (i.e.monetization)

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Value Creation

IoT-based Value Creation

Products are no longer one-and-done.

New features are pushed to customers.

Usage tracking and response to customer behavior.

Traditional Value Creation

Resolution of existing needs in a reactive manner.

Manufacturing well-engineered devices that become obsolete over time.

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Value Capture

IoT-based Value Creation

Revenue is not limited to physical product sales.

Other revenue streams become possible after the initial product sale.

Team up with partners: understand how other ecosystem players make money.

Traditional Value Capture

Focus on selling the next device.

Includes potential commodity advantages such as brand valuation.

Business model relies on customer loyalty.

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Challenges for Device VendorsTraditional hardware centric selling models will challenge the growth of intelligent device manufacturers business.

Copy and IP ProtectionProtect products from illegal copies, reverse engineering and code tampering

Business Model VersatilityAdapt packaging and licensing models to meet evolving business needs and market trends

Lifecycle ManagementCentralize, automate, and manage operational and support activities across the entire licensing lifecycle

Manufacturing ControlEnsure product availability, control inventory , reduce manufacturing and certification costs .

System IntegrityEnsure your device is ready for the IoTecosystem and cannot be hacked or modified.

Product Usage InsightLeverage connectivity to gain full visibility into, feature usage, and consumable status.

Image for illustration purposes only.

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IoT Monetization Topology

BACK OFFICE

AnalyticsCRM

Entitlement Reporting

ERP

Reporting

Licensing

Provisioning

Deployment

Licensing & Security

Software Hardware Chip Cloud

DEVICES & PRODUCTS

Remote Capabilities

Enablement Upgrades Usage

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Security &Protection

UsageTracking Data

EntitlementManagement

ProductPackaging

Digital Product/Service

Software Monetization

Digital Business Architecture

Digital Product / Service

CRMSystem

Marketing Automation

Customer Interaction

CRM

Online Purchasing App

BillingSystem

PaymentMethods

e-Commerce

Monetization Opportunities for the Internet of Things

Business Models for IoT Vendors

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Monetization Opportunities

EcosystemMonetization

ServicesMonetization

DataMonetization

DeviceMonetizationTr

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Monetization ComplexityBasic Advanced

Types of IoT Revenue ModelsThere are four main revenue models.Companies can select one or more modelsto match level of complexity, business needsand the type of customer relationship.

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Device Monetization

How It WorksBasic transactional based product activation model.

Example: Operating RoomMedical devices being activated/updated from remote, function on demand

EcosystemMonetization

ServicesMonetization

DataMonetization

DeviceMonetizationTr

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Monetization ComplexityBasic Advanced

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Services Monetization

How It WorksAdding a service layer to a traditional product into by tying in a recurring pricing model for specific features.

Example: X-Ray MachineCharge per scan or maintenance call on a usage based subscription fee versus a “one

time sell” of the machine.Monetization ComplexityBasic Advanced

EcosystemMonetization

ServicesMonetization

DataMonetization

DeviceMonetizationTr

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Data Monetization

How It WorksOrganizations generate revenues by selling packaged data gathered from sensors.

Example: Traffic DataCompanies buy data about car trafficand sell information about traffic jam

EcosystemMonetization

ServicesMonetization

DataMonetization

DeviceMonetizationTr

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Monetization ComplexityBasic Advanced

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Ecosystem Monetization

How It WorksOrganizations create a platform and make money from other product vendors and end consumers.

Example: Industrial APP StoreCreation of a software environment thatallows integration of industrial controlapplications

EcosystemMonetization

ServicesMonetization

DataMonetization

DeviceMonetizationTr

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Monetization ComplexityBasic Advanced

Evolving Customer Demands‒ New applications are driving the Internet of

Things forward at a fast pace.

Business Transformation‒ The Internet of Things is changing the way

companies do business.

Revenue Opportunities‒ Companies can adopt various revenue models to

generate growth.

Key Takeaways

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