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W H I T E PA P E R

Telecommunications Equipment Providers: Enhancing Customer Satisfaction, and Revenues, with Embedded Software

Telecommunicat ions Equipment Providers: Enhancing Customer Sat isfact ion, and Revenues, wit h Embedded Software

Telecommunications Equipment Providers: Enhancing Customer Satisfaction, and Revenues, with Embedded Software
Introduction
More than ever, embedded software is playing a central role in intelligent device manufacturers’ go-to-market strategies. This trend is especially apparent in markets such as telecom, test and measurement, healthcare, and industrial automation – where manufacturers are under increasing pressure to innovate, rapidly enter new markets, control costs, maximize incremental revenue from existing customers, and deliver a competitively differentiated customer experience. As embedded software has become more integral to their business, more and more manufacturers are discovering the power of software licensing. With licensing, manufacturers can turn device features and/or capacity on and off as appropriate. This allows them to charge customers for the capabilities they want, while not charging them for capabilities they don’t want. Specifically, licensing enables telecom equipment providers to more effectively use embedded software as a means of managing and monetizing the features and functionality they provide in their devices. By adopting the right licensing models, telecom equipment providers can: • Produce different products on the same hardware chassis. This drives down costs by eliminating the need for additional production lines and minimizing the number of SKUs that have to be kept in inventory. • Create innovative products on existing hardware chassis. This reduces the cost and time it takes to bring differentiated products to new or existing markets. • Up-sell existing customers by simply activating additional device capabilities or capacity. This makes it easier to capitalize on incremental revenue opportunities. • Meet evolving customer needs without requiring them to swap out hardware or otherwise disrupt their operations. This makes for a more positive ongoing customer experience.
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These examples highlight why software licensing is such a compelling best practice for intelligent device manufacturers. In fact, in today’s highly competitive and fast-moving markets, the skill with which manufacturers structure the licensing of their embedded software – and the diligence with which they manage their customers’ entitlements – may well turn out to be what separates market leaders from other players. Today, manufacturers are applying software-based licensing principles to manage a wide range of functions in hardware ranging from telecommunication devices and location intelligence equipment, medical equipment, supply chain automation, automobiles, test and measurement, and storage management. This whitepaper outlines key trends and opportunities influencing telecom equipment providers, and how Flexera Software FlexNet® Producer Suite for Intelligent Device Manufacturers can help these companies to fundamentally improve their business. In addition, the whitepaper illustrates the power of licensing-based solutions with a customer implementation scenario.

Trends and Opportunities in the Telecommunications Equipment Arena

At a macro level, a convergence of business issues is driving the software-based differentiation of telecom equipment – all of which can be capitalized upon with software licensing and entitlement management solutions: • hanging economics of intelligent device C manufacturing: All segments of the telecommunications sector are driven by time to market. This fact has driven the rise of standards-based hardware (such as AdvancedTCA) and core operating system software, which has in turn allowed telecom equipment providers to gain economies of scale. Intelligent device manufacturers are increasingly buying, versus building, core subsystems and system software. As a result, their

Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series

Telecommunicat ions Equipment Providers: Enhancing Customer Sat isfact ion, and Revenues, wit h Embedded Software

role is evolving to more of an integrator, and less of a manufacturer. Solution providers seek better ways to differentiate themselves; software is a key means to creating competitive advantage and driving incremental revenue. • rowing revenue contribution from software: As a G corollary to the commoditization of hardware, many telecom equipment providers are focusing more resources on software development. As such, software enables new revenue sources and provides a way to deliver a superior, differentiated customer experience. • oftware-enabled supply chain transformation: With S the underlying hardware becoming more powerful and at the same time commoditized, equipment manufacturers can now build fewer base configurations and deliver more functions. Product capabilities, capacity, versions and price points can be created and modified based on functions that can be turned on and off by licensing of the embedded software. This dramatically streamlines the supply chain and manufacturing processes, as well as lowering inventory carrying costs. The challenge for the telecom equipment provider is to determine how to enable or limit access to certain functions of software, without changing the configuration or SKU of the product. Licensing-based approaches allow providers to enter new markets with a full-function device, and then, as competition enters the market, create lower or higher price points with the same device by enabling or disabling software functions. • rand and revenue erosion from grey market abuse: B As underlying device configurations become more standardized, grey market theft can be perpetrated more easily. For example, demonstration models of products increasingly find their way into the grey market via channels for selling used equipment. These devices are running improper software and typically do not function correctly, posing a serious threat to the customer experience. In addition, grey market sales jeopardize maintenance revenues, as manufacturers lose track of device ownership and thus the maintenance relationship.

• ustomer preferences: In today’s ultra-competitive C business environment, telecom equipment customers are demanding more flexible pricing models, easy access to upgrade features, and a superior customer experience. Embedded software licensing capabilities allow intelligent device manufacturers to meet all of these customer requirements by enabling important capabilities such as field upgrades and a consistent, streamlined customer experience across products.

Turning to Flexera Software for answers

As telecommunications manufacturers address these trends, they increasingly recognize that they face similar issues as software companies. Today’s intelligent device manufacturers are looking to Flexera Software to help them: • Reach new markets by creatively packaging and pricing embedded software • Build revenues by better monetizing capability and capacity • Cut manufacturing costs by using software to differentiate capabilities on zs, and thus reduce the number of unique SKUs • Accurately track customer entitlements and usage • Track channel partner activity, and maximize service and maintenance revenues • Prevent unauthorized use of capabilities without cutting off legitimate customers • Reduce the operational costs associated with shipping software upgrades • Cut customer support costs by offering customers and channel partners self-service and keeping them current on the latest version • Make better development and marketing decisions based on device usage data

FlexNet Producer Suite addresses telecom equipment providers’ unique needs

FlexNet Producer Suite for Intelligent Device Manufacturers is the most comprehensive end-to-end solution for electronic licensing and entitlement management available today. Telecom equipment providers can benefit from Flexera Software’s support for the largest number of embedded software license models; FlexNet Producer Suite provides a single operations view to easily integrate products across multiple software licensing schemes. Flexera Software supports dozens of platforms – the widest range in the industry – enabling telecommunications manufacturers to use it across both large- and small-footprint devices.

Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series

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Telecommunicat ions Equipment Providers: Enhancing Customer Sat isfact ion, and Revenues, wit h Embedded Software

FlexNet Producer Suite for Intelligent Device Manufacturers leverages Flexera Software’s 25 years of industry experience, helping to maximize revenue, cut costs, and eliminate manual processes. It has numerous features that have been optimized for telecommunication manufacturers, including: • Small footprint, embedded client: offers a licensing toolkit that is highly modular, supports several license models, and has a very small footprint (under 50K). This allows telecom equipment manufacturers to keep costs low by using licensing of the embedded software to configure capabilities and capacity on a device while producing a minimum number of device types (SKUs). • High configurability: allows key elements such as security and binding to be configured or replaced as needed. This provides additional flexibility to fine-tune the solution to meet exact requirements or take advantage of existing device capabilities, while keeping the footprint small. • Hands-free activation and silent trials: provides hands-free activation and silent trials that don’t require registration. This transparent in-product activation improves the customer experience and increases upgrades/up-selling by enabling easy trials for new capabilities. • Licensing and entitlement management from end to end: provides a single view for you, your customers and your channel partners to view and manage software embedded on devices and enables you to electronically turn on and off functionality.

Room for improvement – with FlexNet Producer Suite The CTO, who is charged with identifying strategic customer-facing technology initiatives, recognized that the company’s licensing and entitlement processes were inefficient. This sometimes resulted in a lag time of up to two days between a customer request and fulfillment. “In a company as large and complex as ours, strategy is easy, but execution is difficult,” he says of overhauling the company’s licensing processes. “That’s why we partnered with Flexera Software, the industry leader in entitlement management solutions.” Improving customer satisfaction in a key business unit One of first major Flexera Software initiatives the CTO undertook was for the company’s outsourcing division that serves wireless carriers. Wireless carriers contract the Global Communications Solutions Provider to deliver key aspects of their service – such as enabling technology and customer service solutions – thus allowing the carriers to focus more fully on their core business. The outsourcing group is using Flexera Software FlexNet Operations, part of the FlexNet Producer Suite, to offer carriers a self-service portal for procuring additional licenses and capacity in real-time. This capability allows large quantities of the carrier’s call licenses to be quickly moved to parts of the country that experience spontaneous spikes in usage – such as the South, after Hurricane Katrina, or the city that’s hosting the Super Bowl football game. Batch license transfer is an important capability that allows thousands of licenses to be moved in one transaction, helping to ensure that fewer users are denied service during high-volume calling periods. “Before we implemented the FlexNet Producer Suite selfservice portal, our customer, the wireless carrier, had to call an administrative contact to request licenses for additional capacity. The administrator sent an email to sales, which then had to go to the factory and ask the staff there to generate licenses manually, and then email them back to the customer. This process took up to two days – but now customers can execute it themselves, in five minutes, through the self-service portal.” To accomplish this level of seamless functionality, the global communications solutions provider integrated FlexNet Operations with its back-office systems. Flexera Software enables a more consistent experience “FlexNet Producer Suite has helped us improve the way we view and administer entitlements. Now our license generators can be consolidated into a single system, saving us time and money while giving customers a more consistent experience,” says the CTO.

Case Study: A Global Communications Solution Provider Enhances Customer Satisfaction with Flexera Software FlexNet Producer Suite

A global communications solutions provider enables service providers, enterprises and governments worldwide to deliver voice, data and video communication services to end users. The company offers a wide range of wireless and wireline hardware and software solutions – and is now dramatically improving the way it licenses all of them using FlexNet Producer Suite technology. “As with most large companies, we have given our individual business units a high level of autonomy, and thus freedom to make many of their own technology choices,” says the chief technology officer at the global communications solutions provider. “However, from our customers’ view, this has created a fragmented and sometimes cumbersome way of doing business with our company.”

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Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series

Telecommunicat ions Equipment Providers: Enhancing Customer Sat isfact ion, and Revenues, wit h Embedded Software

He says that choosing Flexera Software has been a strategic decision that resulted in a strong relationship and an ongoing partnership between the two companies. “Our partnership has manifested itself in two ways: in the short term, Flexera Software Professional Services worked closely with our team to implement FlexNet Producer Suite to do exactly what we wanted. Looking forward, Flexera Software’s product management team has been very committed to giving our company what we need, factoring our needs into the FlexNet Producer Suite development roadmap. From senior management to our everyday contacts, Flexera Software has shown us how flexible they can be.” The CTO summarizes, “We look forward to continuing to work with Flexera Software to better serve all of our customers. FlexNet Producer Suite is an enabling technology in allowing us to achieve our goal of enhancing customer satisfaction.”

About Flexera Software

Flexera Software is the leading provider of strategic solutions for Application Usage Management; solutions delivering continuous compliance, optimized usage and maximized value to application producers and their customers. Flexera Software is trusted by more than 80,000 customers that depend on our comprehensive solutionsfrom installation and licensing, entitlement and compliance management to application readiness and enterprise license optimization - to strategically manage application usage and achieve breakthrough results realized only through the systems-level approach we provide. Flexera Software is a privately-held company and an investment of private equity firm Thoma Bravo, LLC. For more information, please go to: www.flexerasoftware.com

For more information, please go to:
www.flexerasoftware.com/telecom

Summary

Telecommunication equipment providers are increasingly shifting to a technology and business model that emphasizes value delivery through software. FlexNet Producer Suite is the industry-leading licensing and entitlement management solution for intelligent device manufacturers - unlocking revenue of embedded software and reducing operational costs while streamlining manufacturing processes. FlexNet Producer Suite also delivers unified entitlement management in both on-demand and on-premise options. As competition intensifies in today’s global market, maximizing customer satisfaction, building revenues and reducing costs remain top business imperatives. FlexNet Producer Suite for Intelligent Device Manufacturers allows telecommunication equipment manufacturers to: • Penetrate new markets through cost-effective, softwaredriven product differentiation • Improve customer satisfaction by offering self-service and a consistent experience for downloading, using and upgrading products • Reduce the number of SKUs that must be manufactured, carried and supported • Enable electronic upgrades • Fully monetize maintenance programs with better tracking of channel and end-customer entitlements • Allow new up-sell capabilities to be sampled and activated in the field

where you can learn more about the valuable opportunities Flexera Software offers.

Flexera Software: FlexNet Producer Suite for Intelligent Device Manufacturers Whitepaper Series

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Flexera Software, Inc. 1000 East Woodfield Road, Suite 400 Schaumburg, IL 60173 USA

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