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Forbes
05-08-2025
- Business
- Forbes
The Economic Shift Reshaping How OEMs Manage Products
Thomas Ryd is CEO & cofounder of a device lifecycle management leader with a mission to secure the world's connected devices. Over the past decade, industries shifted from hardware-defined products to software-driven services. From connected thermostats to smart factory equipment, physical devices are now just the starting point—what drives long-term value is the software that powers them. Within this evolution are new business models rooted in subscriptions, recurring revenue and continuous digital engagement. As a result, the traditional 'ship it and forget it' mindset no longer applies. Products must now be treated as living platforms, requiring ongoing management and improvement throughout their lifespan. Changing how products are designed and delivered, OEMs must similarly evolve and adapt how products are managed post-deployment. Moving From Hardware To Software In A Connected Economy The rise of the software-first economy didn't happen overnight, but it's clearly here to stay. Fueled by higher long-term revenue generation and overall consistency, businesses moved away from one-time transactions toward SaaS-based recurring revenue models. This approach offers predictable income, higher margins, scalable growth and often longer customer life cycles—attributes that make software companies especially attractive to investors. But this transformation isn't limited to cloud or enterprise technology. It's happening everywhere. In the automotive sector, vehicles today offer performance enhancements and advanced features, purchased via subscriptions. In industrial settings, smart machines are monitored and optimized through real-time analytics and subscription maintenance contracts. Even in the home, everyday products like appliances, lighting systems and thermostats now function more like digital platforms than static tools, complete with a list of optional, subscribed features, functionality and value. A key driver behind this transition is the Internet of Things (IoT), introducing billions of smart, connected devices into the global economy. Each of these endpoints represents an ongoing software component that must be maintained, secured, improved and funded over time. The value of a product is no longer constrained to a static state at the time of purchase. Each product, how it performs and improves over time and the revenue it generates, is dynamic, with the ability to change through its software. Software is the heartbeat, and OEMs managing it effectively are critical to long-term success. The Implications For Smart Product OEMs For OEMs, the software-first economy presents a turning point in traditional product management. The days of building a device, shipping it and moving on to the next generation are over. Today's connected products demand ongoing engagement and support beyond the point of sale. Consumers expect regular software updates, robust cybersecurity and new features delivered over time—regardless of whether they're using a smartphone, connected appliance or industrial equipment. Software-centric products place a new level of responsibility squarely on the shoulders of OEMs. It's no longer acceptable—or sustainable—to manage smart products with a hands-off strategy. The manufacturer must ensure every device remains secure, functional and compliant throughout its life cycle. To succeed in this environment, OEMs must think like software companies. They need to adopt agile development processes, deploy updates continuously, embrace a proactive, service-oriented mindset and establish a business model that supports the ongoing resource requirements. And security can no longer be an afterthought; it must be embedded throughout, from design to final decommission. Ultimately, this is a strategic shift. Manufacturers who fail to adapt risk falling behind as competitors deliver smarter, safer and more reliable products through dynamic software-first strategies. DLM: The Framework For The Software Revolution Today's OEMs need a strategic framework that supports long-term product performance, security, compliance and revenue generation: device life-cycle management (DLM). Modern DLM is a holistic, end-to-end approach to managing connected devices from concept to retirement. By implementing DLM, OEMs shift from reactive, break-fix support models to proactive life-cycle management. It helps ensure that devices stay up-to-date, resilient to threats and in full regulatory compliance throughout their operational life. This structured approach empowers OEMs to treat their devices like evolving software platforms, managing updates, security and performance just as a SaaS provider would. Without an end-to-end view of smart products, it's challenging for OEMs to capture the full scope of resources required to support the product. DLM provides the overall picture and key life-cycle stages so OEMs can adjust their business models and resource allocation appropriately. DLM As A Competitive Differentiator For OEMs operating in regulated industries like healthcare or automotive, DLM is critical for maintaining compliance with evolving cybersecurity mandates such as the Cyber Resilience Act (CRA) and NIS2. These regulations require not just secure design but verifiable processes for patching, monitoring and retiring connected devices. Even outside heavily regulated sectors, DLM marks the beginning of viewing traditional hardware products through a software-centric lens. This unlocks technical benefits like improved security, reduced downtime and faster feature rollouts while also supporting modern business models. Subscription-based maintenance plans, over-the-air (OTA) feature packages and add-on services help OEMs monetize the full life cycle of a device—an essential part of success in an economy where long-term support costs can outpace the original sale price. Forward-thinking OEMs understand that DLM isn't just about updates and maintenance but also about building a sustainable future. When leveraged strategically, it signals reliability and recurring revenue that simultaneously boosts customer loyalty. In a market where differentiation hinges on software quality and post-sale engagement, DLM is a strategic asset no OEM can afford to ignore. Future-Proofing In A Software-Defined World The line between hardware and software has all but disappeared. Every connected device is now a platform—one that must evolve, improve and remain secure over time. In this new reality, success is defined not by what a product does at launch but by how well it performs and adapts throughout its life cycle. OEMs that embrace DLM are better positioned to deliver the security, agility and customer satisfaction that today's market demands. But sustainability requires more than operational excellence—it depends on monetization. Without a plan to fund long-term software upkeep, the cost of updates and maintenance will eventually exceed the value of the original sale. To future-proof both products and business models, DLM must move from the backend to the boardroom. It's no longer a technical detail—it's a strategic imperative. OEMs who recognize this shift and invest accordingly will lead the software-defined economy. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
Forbes
01-07-2025
- Business
- Forbes
How IoT Came To Dominate Everyday Life
Thomas Ryd is CEO & cofounder of a device lifecycle management leader with a mission to secure the world's connected devices. The internet has transformed nearly every aspect of modern life over the past few decades. Smartphones, laptops and digital communication are everyday essentials, seamlessly woven into how we work, live and stay connected. Beyond these ubiquitous technologies, the quieter rise of connected devices unfolded. From refrigerators that remind you to restock groceries, video doorbells that enhance home security and industrial robots that fine-tune production lines to modern breakthroughs like self-driving cars and autonomous security robots, the Internet of Things (IoT) is an invisible yet indispensable part of daily life. Decades of cumulative progress—advances in wireless connectivity, miniaturized sensors, cheaper technology and better computing power—gradually converged to unlock new IoT possibilities and a technology-enhanced future. For OEMs competing in the connected device market, an IoT retrospective uncovers patterns in progress that still influence today's challenges, especially concerning securing, managing and updating connected devices at scale. The Foundations Of IoT: Leveraging Data The foundation of IoT predates modern commercial offerings. In the late 1960s, ARPANET demonstrated how networked systems could share data. By the 1980s, technologies like radio-frequency identification (RFID) and machine-to-machine (M2M) communication enabled devices to exchange data without human input. By 1999, Kevin Ashton, a British technologist at Procter & Gamble, coined the term "Internet of Things" to describe a vision where everyday objects interact digitally. Early IoT applications took root in logistics and manufacturing. Companies like Walmart used RFID tags to improve inventory tracking, while factories adopted M2M systems to automate operations. Defense industries also explored connected equipment to enhance battlefield awareness, proving the value of connected devices well before IoT became mainstream. Challenges That Emerged With Mainstream IoT The 2010s marked IoT's breakout from industrial backrooms into everyday life. Devices like Nest thermostats, Fitbit wearables and voice assistants such as Alexa brought smart technology into homes, fitness and daily routines. Cloud computing fueled this growth by enabling smaller, cheaper and more powerful devices. It supported everything from car infotainment systems to smart farming, like John Deere's use of IoT sensors to monitor soil and boost crop yields in real time. However, this rapid ascent came with hurdles. As more devices came online, the lack of standardization across hardware and communication protocols made interoperability increasingly difficult. Devices from different manufacturers often couldn't communicate effectively, creating fragmented systems and stalling progress. The complexity in the ecosystem increased the cost, time-consumption and failure rate of IoT systems, especially at scale. At the same time, the proliferation of connected devices created a much larger attack surface. Countless OEMs rushed to launch products, often skipping robust security measures. Major incidents like Stuxnet, the Yahoo data breach and the Mirai botnet highlight vulnerabilities, with data to cyber-physical repercussions. Insecure endpoints, poor management and generally immature cybersecurity practices created an ecosystem ripe with exploitable gaps. As IoT adoption surged, so did the complexity of managing vast fleets. What worked for pilot deployments quickly became untenable at scale. OEMs faced challenges in onboarding, updating and monitoring thousands of products across varied environments, connectivity and applications. Without centralized visibility and control, device management and security became resource-intensive and error-prone. Lessons Learned In The Evolution Of IoT Security remains a significant weakness, exposed by incidents from hacked baby monitors to pipeline ransomware attacks. To bolster security and safety, standards and regulations emerged to force accountability, including compulsory NERC CIP for the North American energy grid and GDPR for EU data privacy. Following suit, the EU Cyber Resilience Act forces manufacturers to manage product security for EU market access. Security can no longer be an afterthought. Product strategy must encompass secure design, vulnerability monitoring, regular updates and managed decommissioning from the outset. Compliance isn't solely about avoiding penalties but maintaining long-term viability in a connected world. Many connected products were launched without a clear strategy for long-term support, updates or integration—leading to compatibility issues, downtime and regulatory hurdles. GE's industrial IoT platform, Predix, offers a cautionary tale. Despite strong early adoption, limited integration planning and a lack of scalability ultimately forced GE to downsize its digital division. Building the product is the beginning, not the destination. Enterprises expect secure, interoperable systems that evolve over time. Failing to plan for ongoing support, updates and ecosystem alignment introduces risks that can derail even the most promising innovations. Bold visions aren't enough. Projections of IoT transforming sectors like healthcare and urban planning often outpaced real-world readiness. Companies like Waymo made headlines with self-driving taxis, yet deployment is still limited to a few cities. Complex vetting, regulation and safety challenges slow mass adoption. Events like CES continue to showcase futuristic technology, but the path from demo to mass-market reality remains long, oftentimes measured in decades. Adding software to hardware transforms the business model. Long-term success requires not just innovation but ongoing support, including updates, maintenance, security and compliance. OEMs must plan for sustainable revenue sources to fund the ongoing costs of software. The Road Ahead Billions of new devices are expected to come online. However, adding more devices to the mainstream does not secure the future of IoT if these connections are not also more resilient. This next wave of growth demands enhanced security, device life cycle management and financial stability to enable continuous support and operability. Products must be reliable while maintaining robust security and privacy protections—regardless of environment, complexity or application. Ultimately, tech innovation won't purely define the next chapter of IoT. It will hinge on how effectively OEMs manage the device life cycle—from secure design and deployment to ongoing updates, compliance and responsible decommissioning. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
