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

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

2. Electronic Test and Measurement: Creating New Value, and Revenue Streams, with Embedded Software
2 Flexera Software: FlexNet Producer Suite Whitepaper Series
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 don’t 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.
• 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.
These examples highlight why software monetization
is such a compelling best practice for intelligent
device manufacturers.
In fact, in today’s highly competitive and fast-moving
markets, the skill with which manufacturers structure
the monetization 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 monetization 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 software monetization 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
devices—all of which can be capitalized upon with software
monetization solutions:
• Changing economics of intelligent device manufacturing:
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,

3. Electronic Test and Measurement: Creating New Value, and Revenue Streams, with Embedded Software
3Flexera Software: FlexNet Producer Suite Whitepaper Series
and less of a manufacturer. Manufacturers seek better
ways to differentiate themselves; software is a key
means to creating competitive advantage and driving
incremental revenue.
• Growing revenue contribution from software: As a
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.
• Software-enabled supply chain transformation: With
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.
• Brand and revenue erosion from grey market abuse:
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.
• Customer preferences: In today’s ultra-competitive
business environment, customers are demanding
more flexible pricing models, easy access to upgrade
features, and a superior customer experience.
Software licensing and monetization 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. Today’s intelligent
device manufacturers are looking to Flexera Software to
help them:
• Reach new markets by creatively packaging and
pricing embedded software
• Build revenues by better monetizing capability
and capacity
• Cut manufacturing costs by using software to
differentiate capabilities on devices, and thus reduce
the number of unique SKUs
• Accurately track customer entitlements and usage
• Track channel partner activity, and maximize service
and maintenance revenues
• Prevent unauthorized use of capabilities without cutting
off legitimate customers
• Reduce the operational costs associated with shipping
software upgrades
• Cut customer support costs by offering customers and
channel partners self-service and keeping them current
on the latest version
• Make better development and marketing decisions
based on device usage data
FlexNet Producer Suite Addresses Intelligent Device
Manufacturers’ Unique Needs
FlexNet Producer Suite for Intelligent Device Manufacturers
leverages Flexera Software’s 25 years of industry experience,
helping to maximize revenue, cut costs, and eliminate
manual processes. It is optimized for intelligent device
manufacturers, including:
• Small footprint, embedded client: offers a licensing
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).
• High configurability: allows key elements such as
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.
• Hands-free activation and silent trials: provides hands-free
activation and silent trials that don’t require registration.
This transparent in-product activation improves the
customer experience and increases upgrades/up-selling
by enabling easy trials for new capabilities.

4. Electronic Test and Measurement: Creating New Value, and Revenue Streams, with Embedded Software
4 Flexera Software: FlexNet Producer Suite Whitepaper Series
• End-to-End licensing and entitlement management and
delivery: 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.
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 software
monetization 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 Software’s 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:
• Significantly lowered its manufacturing and inventory
carrying charges
• Enabled field upgradeability of the entry-level product
• Monetized its maintenance program
• More effectively enabled dealer demonstration devices
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 device’s firmware,
to enforce and monitor each device’s 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
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 manufacturer’s 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:
• Trial usage, providing full-product capability for a fixed
period of time
• Different device configurations for a variety of uses
within the two distinct markets
• Fixed amounts of use beyond a trial period but not
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 customer’s 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 manufacturer’s equipment could only
be upgraded on-site or at two service locations, which
presented numerous challenges including:
• The cost of deploying field service representatives to
perform the upgrades
• The customers’ downtime when equipment was being
shipped and serviced

5. Electronic Test and Measurement: Creating New Value, and Revenue Streams, with Embedded Software
5Flexera Software: FlexNet Producer Suite Whitepaper Series
• The risk of damage to improperly packed
inbound devices
• The cost of international shipping and customs fees
• Lost revenues for the network test equipment
manufacturer, due to a painful upgrade process
Now, through FlexNet Producer Suite, upgrades can be
easily executed by the customer, on-site:
• The customer purchases an upgrade and then connects
over the Internet to the entitlement management system
at headquarters
• A new entitlement is then downloaded to the device – in
effect, upgrading the license
• When the device is re-booted and re-initialized, it
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:
• First, they had demonstration models, which are
provided at a discount, being sold on the grey market
• Second, if they sent demo devices that were not viable
for resale, they were not properly showcasing the
network management equipment’s 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 software monetization 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 Software’s FlexNet Producer Suite is the industry-
leading software monetization 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 cloud and
on-premises options.
As competition intensifies in today’s global market,
maximizing customer satisfaction, building revenues and
reducing costs remain top business imperatives. FlexNet
Producer Suite for Intelligent Device Manufacturers allows
companies to:
• Penetrate new markets through cost-effective, software-
driven product differentiation
• Improve customer satisfaction by offering self-service
and a consistent experience for downloading, using and
upgrading products
• Reduce the number of SKUs that must be manufactured,
carried and supported
• Enable electronic upgrades
• Fully monetize maintenance programs with better
tracking of channel and end-customer entitlements
• Allow new up-sell capabilities to be sampled and
activated in the field
About Flexera Software
Flexera Software helps application producers and
enterprises increase application usage and the value they
derive from their software. Our next-generation software
licensing, compliance and installation solutions are essential
to ensure continuous licensing compliance, optimized
software investments and to future-proof businesses against
the risks and costs of constantly changing technology. Over
80,000 customers turn to Flexera Software as a trusted and
neutral source for the knowledge and expertise we have
gained as the marketplace leader for over 25 years and for
the automation and intelligence designed into our products.
For more information, please go to:
www.flexerasoftware.com
More information:
You can learn more about this solution, download
datasheets, and watch Webinars by visiting:
www.flexerasoftware.com/measurement

6. Flexera Software LLC
(Global Headquarters):
+1 800-809-5659
United Kingdom (Europe,
Middle East Headquarters):
+44 870-871-1111
+44 870-873-6300
Australia (Asia,
Pacific Headquarters):
+61 3-9895-2000
For more office locations visit:
www.flexerasoftware.com
Copyright © 2015 Flexera Software LLC. All other brand and product names mentioned herein may be the trademarks and registered trademarks of their respective owners.
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