Blog Entry

Nov 12
2013 

Embedded Manufacturers: The Tide Has Turned

One of the biggest challenges being faced by embedded device manufacturers is how to monetize the software component within their product offerings.

Historically, embedded end customers struggled with the idea that they were purchasing any ‘software’ when buying embedded equipment, even if it’s actually the embedded software that provides almost all of the great capability the end customer enjoys. They were simply buying a ‘box’ and that box did what they expected it to. The price they paid for that box was connected to a tangible object (which might also be dressed in a piano-black chassis with brushed aluminium cooling vents, and a multi-function colour display panel for good measure).

 

This presented significant challenges to software licensing in the embedded industry. With such little perceived value for the software component, it was very difficult for device manufacturers to ask their customers to start paying for software that used to be considered free (or even worse, irrelevant). This has been holding back the growth of licensing in the embedded industry.

 

Thankfully the tide is finally turning.

 

In these days of reduced hardware manufacturing costs, all of that high gloss paint, brushed alloy, and glass (and of course all that silicon on the inside) is representing a smaller and smaller proportion of the overall value of the device. End customers are starting to come round to the idea that there is a lot more that goes on under the surface of the shiny black box, and this is great news for device manufacturers who want to start modularizing and licensing their software components.

 

For years, software vendors have benefited from their customers’ acceptance that software is valuable and should be paid for. Now it’s time for embedded device manufacturers to take their turn!