A new survey report, The Third Industrial Revolution: Intelligent Devices, Software, and the Internet of Things, prepared jointly by Flexera Software and IDC, claims to “provide unique insights into how the third industrial revolution sweeping the global economy is being fueled by device manufacturers – transforming their products, business models and revenues streams with intelligent and Internet-connected technology.”
According to Flexera, “The report indicates that reality is catching up to the hype. Device manufacturers are significantly transforming their product and services lines through software-driven intelligent devices, internet of things devices and software licensing/entitlement management capabilities that enable monetisation of products and services.
The number of Internet of things makers will more than double within two years: Only 30 percent of respondent device makers currently develop internet of things devices. But 34 percent more plan on doing so over the next two years.
- Software-enabled intelligent devices continue strong growth:
Today 50 percent of respondents say they develop intelligent devices. Another 21 percent plan on making their devices intelligent over the next two years.
- New product/services categories are being created:
79 percent of respondents say they are or plan on delivering remote monitoring and maintenance to their product/service mix; 66 percent will add business intelligence capabilities; 37 percent will improve their supply chains with new services, such as automatic replenishment of used goods (i.e. replenishment of empty water coolers).
- Software licensing/entitlement management is key to monetising IoT:
60 percent of device makers use software licensing and entitlement management systems to monetize their intelligent and Internet-connected devices, allowing them to develop new offerings that bundle hardware, services and/or consulting.
- Proportion of revenues from hardware declining, proportion from services rising:
The number of device makers who say that 50 percent or more of revenues comes from hardware will decline by five percent over the next two years while the number of device makers who say that 50 percent or more of revenues comes from services will increase by six percent over the next two years.