Great Licensing Use Case from a Medical Device Producer

In the last year I’ve been in Europe meeting with various customers to learn about their implementations. I thought I would share this story (anonymized) as I think it is representative of how licensing and entitlement management implementations go. I’ll call this company “PubCo1”.

  • PubCo1 has been in the hardware medical space for a while
  • They have branched into the medical management space, integrating their medical devices so they can enable:
    • Data acquisition
    • Date storage and sharing (patient A device #1 results)
    • Diagnosis (review data and identify issues and suggest corrections)
    • Treatment planning (corrections will take 3 steps-review in 3 months)
    • Workflow (please review this data)
    • Reporting (average case of this type takes Y time, # of cases of this type are increasing in this age group, etc.)
  • They took a step back and realized that:
    • Many of their software products were being “abused” (they didn’t have licensing in them)
    • For those that had licensing:
      • There were multiple systems with different experiences, maintained by different groups
      • For some products they used dongles – which were costly and they always had issues with those
      • They lacked flexibility (hardcoded simple yes/no style)
      • All required manual processes for generating the licenses and installing them
    • Licensing will become more important as they add more software to differentiate their hardware
      • Ship hardware with everything, only turn on some things
      • Enable subscription/rental/pay-for-use licensing models
      • Slice/dice the same solution for different market/pricing needs
  • They created a company-wide project with the following goals:
    • Prevent illegal copying
    • Add new revenue streams
      • Charge for versions (or charge for maintenance) and add-on features
    • Automate the licensing process to reduce costs and improve customer-satisfaction
    • Create customer/software central inventory to better understand customer patterns, data mining and ultimately sales opportunities
    • Capture end customer
      • They are very channel/value added reseller dependent and often didn’t know the end customers
    • Reduce engineering costs and complexity: one code, many flavors and many prices
  • They then did an evaluation with the following considerations: 

Cost Grid

  • They selected Flexera, going live with two (2) products initially and plans to add more the next year
    • They went live with:
      • “Call home” from the product with offline possible via email
      • Nodelock and floating licenses
      • All products had “ASRs” (30 days use without needing a license)
      • Lose integration with the ERP
    • They learned a number of things:
      • If done as a strategic objective, implementing licensing and entitlement management impacts far more than just products
        • It affects almost every part of the organization
        • Moving from non-licensing to licensing brings a large number of topics for discussion, for example:
          • Different customer profiles and different needs
          • How to price software (vs. hardware)
          • How to handle updates and upgrades
          • How to incent customers to upgrade
          • Importance of licensing models
          • What is the “right amount” of “slicing and dicing”
    • They are continuing to put licensing in additional products and fine tuning the process based on customer feedback.

Things I like about this use case:

  • They are a hardware vendor that is realizing that they can augment their solution by providing additional software capability
    • And make money by doing so
  • They prioritized their goals in the right order
    • Compliance increase #1, monetization #2, ease of experience #3, product analytics #4, end customer #5, and reduction of cost #6
    • Licensing done right isn’t just about reducing costs or engineering time, it’s a product / sales / pricing/ marketing strategy first and with some good operational consequences
  • They bit the bullet and decided that they were going to use this as a transformational initiative – instead of a “widget” project
    • It took them longer and required more energy, but that’s true of all transformational initiatives

Want to share some other stories? Drop us a line…..

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