Digitalization, Servitization, Consumerization: The Keys to Software Monetization

Last updated: 23 January 2018

One of the major drivers in our connected landscape is the shift in end-user preferences: the increasing demand for ease of access to software upgrades, flexible pricing models and a superior customer experience – namely, digitalization, servitization and consumerization.

These trends are forcing independent software vendors (ISVs) and intelligent device vendors (IDVs) alike to fundamentally rethink their attitudes towards value – their value proposition to their customers and how to monetize the value they create. This is essential for their long-term stability and sustainability.

Digitalization is about operational efficiency – system consolidation, process automation and service delivery. Moving to digital product licensing allows companies to automate and speed up fulfillment processes, create a more scalable back office and recognize revenue much quicker. Furthermore, customers benefit from a seamless software delivery process, while ISVs and IDVs stay connected with their customers by notifying them directly about product updates and new releases.

Servitization is about selling differently, offering flexible business models, tracking product usage and gaining business insights. Focused on the services around a product, rather than the product itself, the purpose of servitization is to build long-term relationships through appropriate service-oriented engagements that relate to what customers actually consume. This offers the opportunity to enable change and innovation while increasing agility and ease of adoption.

Consumerization is about delivering the customer experience users expect today. This means applying the B2C experience to the business world. ISVs and IDVs have to empower their customers through user portals, services and tools that enable self-activation and upgrade from any device at any time. That’s what consumerization is all about; focusing on the customer – with user experience being the catalyst for driving change across an organization.

The discussion for ISVs and IDVs is no longer about if or when customers expect them to deliver a consumer-like experience. It is now only about How the Digital Customer is Changing B2B and how ISVs and IDVs need to operate, sell and price differently to remain in the game.

Want to learn more? In our upcoming blogs, our experts will be relating to each of these market trends in more detail. So stay tuned!

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