14/12/2017 06:00:07

Gemalto research reveals hardware technology companies see 11% increase in earnings following shift to software-based revenue models

Related content
22 Jan - 
Gemalto: Certain mandatory daily disclosures under the ..
16 Jan - 
Gemalto and Ponemon Institute Study: Big gaps emerge be..
16 Jan - 
Gemalto and Ponemon Institute Study: Big gaps emerge be..

  • Nearly all (94%) device makers have invested in software development in the past five years
  • Nine in 10 (88%) believe the Internet of Things (IoT) is driving growth within the manufacturing industry

  • 84% have changed - or have already changed - their business model to put software at its core in delivering services and generating revenue

  • Of the 37% who have made the transition, the average increase in revenue has been 11%

Amsterdam, December 14, 2017 - Surveying 300 business decision makers in device manufacturing firms across five major global markets, Gemalto, the world leader in digital security, reveals that the device manufacturing industry is embracing software over hardware as its primary business model.

The change highlights how crucial software is becoming to device manufacturers, specifically in improving business performance and growing revenue. And, as end-users begin to demand more options and control of their devices and data, entire industries are being forced to change their business models and strategies to cater to their customers.

According to Gemalto's 'How Software is Powering the Hardware Renaissance' report, the majority (84%) of organizations in the sector are changing how they operate. In fact, nearly four in 10 (37%) have already made a full shift to a software-centric business model, one that places software at the core of how a company delivers value and generates revenue. The research also found that 94% of respondents have increased their investment in software development in the last five years. Germany is leading the charge. All (100%) of German organizations questioned have boosted their software-based services over this time; with France second (98%) and the US (93%) in third.

Substantial benefits

Hardware technology companies are already reaping substantial benefits - of those that have changed their models, the average increase in revenue has been 11%. They expect further growth in the next five years, with the revenue from software projected to rise from 15% to 18%.

As well as revenue growth, businesses that have moved to software-based selling have seen other benefits. Over eight in 10 have driven diversity in hardware with software features (86%), implemented remote feature upgrades (84%) and improved customer experience (84%). Businesses also report having a more flexible strategy that allows them to adapt to market change (79%), better control copy protection (76%) and being more competitive in the market (73%).

These changes are also having a positive impact for employees. The majority of businesses have retrained their employees (64%) and hired new ones (58%), with three in five (61%) also revealing they have or intend to reshuffle employees into different roles.

Opportunities in IoT

With businesses starting to see the potential of the IoT, software-based business models are generating commercial benefits. Around nine in 10 respondents (88%) believe IoT is driving growth in the industry and that IoT itself is a chance to change their company's business model (85%). Enabling automated upgrades (61%), remote support (57%), collecting usage analytics (54%) and gathering increased and higher quality customer insights (53%) are the main benefits businesses see IoT enabling.

Challenges of software-based selling models

While it may bring substantial benefits and new opportunities, changing from a hardware to a software-based selling model isn't without challenges. When it comes to practicalities, almost all organisations (96%) that have changed, or are changing, have experienced some difficulties in making the transition work.

Looking at the challenges faced in more detail, one in two (56%) respondents reported that they needed to hire staff with different skills. Around one in three said solutions evolved organically without a central strategy (36%) and managing new sales and operational methodologies with outdated legacy processes (34%), caused challenges in the transition.

"The results of this survey validate what we see on a daily basis with our customers as we help them make this transition," said Shlomo Weiss, Senior Vice President, Software Monetization at Gemalto. "Companies who adopt software-based revenue models will reap three main benefits: long term relationships with their customers, predictable revenue streams and a clear competitive advantage. From gaining insight into product usage, to pay-per-use payment structures and on to new market penetration - all the companies we surveyed identified a real need to transform how they do business."

About the survey

Independent technology market research specialist Vanson Bourne surveyed 300 IT decision makers across the US, UK, France, Germany and Japan on behalf of Gemalto, the world leader in digital security. The respondents were from organizations that manufacture software-enabled hardware.

Additional Resources

About Gemalto

Gemalto (Euronext NL0000400653 GTO) is the global leader in digital security, with 2016 annual revenues of €3.1 billion and customers in over 180 countries. We bring trust to an increasingly connected world.

From secure software to biometrics and encryption, our technologies and services enable businesses and governments to authenticate identities and protect data so they stay safe and enable services in personal devices, connected objects, the cloud and in between.

Gemalto's solutions are at the heart of modern life, from payment to enterprise security and the internet of things. We authenticate people, transactions and objects, encrypt data and create value for software - enabling our clients to deliver secure digital services for billions of individuals and things.

Our 15,000+ employees operate out of 112 offices, 43 personalization and data centers, and 30 research and software development centers located in 48 countries.

For more information visit www.gemalto.com, or follow @gemalto on Twitter.

Gemalto media contacts:

Tauri Cox

North America

+1 512 257 3916

tauri.cox@gemalto.com

Sophie Dombres

Europe Middle East & Africa 

+33 4 42 55 36 57 38

sophie.dombres@gemalto.com 

Jaslin Huang

Asia Pacific

+65 6317 3005 

jaslin.huang@gemalto.com

 

Enriqueta Sedano

Latin America

+52 5521221422

enriqueta.sedano@gemalto.com 

   

Press release (PDF)

2017 Survey Picture

2017 Survey Infographic


This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Gemalto via Globenewswire

Attachment 1: 828553.pdf
Attachment 2: 828561.pdf
Attachment 3: 828562.JPG

Post comment

Related debate

  • 1 week
  • 1 month
  • 1 Year
Ingen indlæg

Man Group PLC : Form 8.3 - [UBM plc] - Amendment

22/01/2018 14:52:32
Amendment to cash-settled derivatives positions and transactions, sections 2(a) and 3(b). FORM 8.3 PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% OR MORE Rule 8.3 of the Takeover Code (the "Code") 1.         KEY INFORMATION (a) Full name of discloser: ..

Boussard & Gavaudan Investment Management LLP : Form 8.3 - UBM Plc

22/01/2018 13:22:35
FORM 8.3 PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% OR MORE Rule 8.3 of the Takeover Code (the "Code") 1.         KEY INFORMATION (a)  Identity of the person whose positions/dealings are being disclosed: Boussard & Gavaudan Investment Manage..

Dimensional Fund Advisors Ltd. : Form 8.3 - Tesco Plc - Ordinary shares

22/01/2018 10:54:08
FORM 8.3 PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% OR MORE Rule 8.3 of the Takeover Code (the "Code") 1.         KEY INFORMATION (a) Full name of discloser:   Dimensional Fund Advisors Ltd. ("Dimensional"), in its capacity ..

Most read news

  • 24 hours
  • 48 hours
  • 1 week
1
PacketFabric Announces Scalable Connectivity to Multiple Cloud Service Providers
2
Post-stabilisation Pbb € 500mn senior 2022
3
West’s Unified Communications Services Attains Cisco Powered Cisco Spark Service Provider Designation
4
Portola Pharmaceuticals Announces Acceptance of Late-Breaker Abstract Highlighting New Data for Andexanet Alfa at ACC.18
5
Southern Missouri Bancorp Reports Preliminary Results for Second Quarter of Fiscal 2018; Dividend of $0.11 Per Common Share Declared; Conference Call to Discuss Results Scheduled for Tuesday, January 23 at 3:30 P.m. Central Time

Related stock quotes

Gemalto 49.60 0.1% Stock price increasing

Buy and sell signals

  • Trend
  • Moneymachine

Copyright Euroinvestor A/S 2018   Disclaimer and Terms of Use
Quote information is delivered by Morningstar.
Data is delayed 15-20 minutes according to the distribution agreements set by the different exchanges.
 
23 January 2018 09:47:05
(UTC+00:00) Dublin, Edinburgh, Lisbon, London
Version: LiveBranchBuild_20180122.2 - EUROWEB4 - 2018-01-23 10:47:05 - 2018-01-23 09:47:05 - 1000 - Website: OKAY