Top Tips: Turning an Automobile into a Continuous Revenue Stream

What auto manufacturers need to consider when adopting a software-driven business model

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Cris Wendt is a Principal Consultant with Flexera Software Global Consulting Services Organisation. His focus is on strategic business model issues relating to implementing electronic licensing, as well as the internal change management aspects of undertaking this business transformation.

Automobile manufacturers face a financial conundrum.  They spend billions of dollars investing in new automobile features and technology to keep customers in their showrooms.  But they have a very narrow window of opportunity to turn that investment into revenue. 

But what if a vehicle’s purchase represented the beginning of the manufacturer’s revenue stream – and not the end? What if the vehicle could be continually enhanced, upgraded, downgraded and modified based on the evolving needs and tastes of the customer? It’s possible with a software-driven business model.

But how do automotive manufacturers make the transition? In our experience, a software-driven business transformation requires auto-manufacturers to:

Re-think product packaging and business models based on how consumers want to use automobiles and related apps and services. Automobile manufactures will need to segment their customers more and create tailored “platform + apps + services” offerings at different prices points.

Track and manage entitlements - Every driver and automobile could be configured differently based on the device platforms (e.g. dashboard system), related apps and services. Layered on top are the different ways drivers might have purchased apps and services, ranging from try-before-you-buy, subscription models, freemium models, pay-by-use, outright purchases and so on. All this can become quite complicated very quickly, but tracking and managing consumer entitlements is an essential prerequisite to making “platform + apps + services” real.

Automate the entire app, device platform and entitlement lifecycles - These lifecycle processes include: app installation and activation, subscription management, firmware and app updates, device platform provisioning, configuration management, device monitoring and remote management, app upgrades and other changes to entitlements. Internet connectivity is a key enabler for automation of firmware and software updates, as it is for data uploads from and downloads to automobiles at the heart of many of these processes.

Look at existing technology powering the Internet of Things - While some of this might still be hypothetical at this stage in the auto industry, the technology already exists and is being used today in many types of intelligent devices across industry sectors such as telecommunications, medical devices, oil and gas, test and measurement, and building automation to name a few. There’s no reason why it can’t be adopted by auto manufacturers.

Control licensing and entitlement management via embedded software - Embedded software that is controlled via licensing and entitlement management is the enabling technology that can help auto manufacturers transform their vehicles into infinitely customisable, upgradable services that can generate revenue throughout their useful lives.


Cris Wendt is Principal Consultant at Flexera Software