New Delhi, Dec 15 - With the device manufacturing industry embracing software over hardware as its primary business model, a new report said on December 15 that 84% of the organisations in the sector globally have already put software at its core in delivering services and generating revenue.
According to a report by global IT security firm Gemalto, nearly all (94%) device makers have invested in software development in the past five years and 88% of the enterprises believe the Internet of Things (IoT) is driving growth within the manufacturing industry.
"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," Shlomo Weiss, Senior Vice President, Software Monetisation at Gemalto, said in a statement.
"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," Weiss added.
Out of the 84% companies who have moved on to a software-centric approach, 37% firms have had 11% average increase in revenue. They expect growth in the next five years, with the revenue from software projected to rise from 15 per cent to 18%.
"Germany is leading the charge. All (100 per cent) German organisations surveyed have boosted their software-based services over this time in last five years followed by France (98%) and the US (93%)," the report said.
The report also noted that businesses that have moved to software-based selling have seen other benefits.
Over eight in 10 (86%) firms have driven diversity in hardware with software features, 84% implemented remote feature upgrades and 84% improved customer experience.
Seventy nine per cent businesses also report having a more flexible strategy that allows them to adapt to market change, 76% have better control copy protection and 73% are becoming more competitive in the market.
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.