Using Subscription Billing to help businesses prepare for the IoT

1. Using Subscription Billing to help businesses prepare for the IoT © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential. 1

2. Using Subscription Billing to help businesses prepare for the IoT The Internet of Things isn't shutting down anytime soon. According to the latest Ericsson Mobility Report, connected IoT products will outnumber connected mobile devices by 2018 – just two short years from now. New adopters will propel the market to about 16 billion devices by 2021 at a compound annual growth rate of 23 percent from 2015 until that time. The Asia-Pacific area will continue to lead the way in terms of number of connected devices, with Western Europe falling in second place. Central and Eastern Europe, Latin America and Africa and the Middle East will have the fewest devices – Ericsson expects these regions will have less than one billion devices each by 2021. Company executives expect to use more IoT products, but are they ready? As the Ericsson Report mentioned, most of the growth in the IoT market will come from new adopters. This view isn't unfounded, as many people expressly state they expect to use IoT products in the coming years. A large section of these new users will likely be in corporate sectors. A study by IndustryWeek and the Genpac Research Institute found 81 percent of businesses and organizations consider the Industrial Internet of Things a key component of their future success. In fact, IIoT is even more critical to businesses making over $1 billion annually – 96 percent of these companies believe the technology and the data it brings will help them in the future. Most cite growth and agility as their greatest priorities, but only a quarter have a clear plan for bringing the IIoT on board. Of those that have a strategy in place, only 24 percent are happy with it. 2 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

3. The number of connected devices worldwide will increase greatly by 2021. 3 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

4. When broken into categories, high-tech companies are more satisfied than other manufacturers – 40 percent to 13 percent, to be precise. IoT product providers should be excited about such projected market growth, but the fact that many businesses either don't have a plan for IIoT execution or aren't happy with their strategy is a little concerning. One expects a bad strategy or lack thereof will bring these businesses lots of headaches when they decide to start adopting IIoT devices. This is where providers can step in and help these enterprises by making the path to IoT and IIoT adoption as simple and unobstructed as possible. One way to do so is to use a subscription billing model that businesses can easily incorporate into their finances. Subscription billing makes life easy for IoT providers and users Charging a recurring fee for IoT or IIoT products simplifies things for both providers and consumers. The regular payments ensure a consistent base of revenue necessary to keep connected devices up and running. "It's impossible to fund IoT products with a single one- time payment." Aside from constant internet access, IoT providers also need to pay for round-the-clock security, various upgrades and version releases, bug fixes, storage and more. It's impossible to pay for all of these things with a single one-time payment, no matter how large that payment is or how many installments it's broken into. 4 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

5. Providers could use the licensing model that used to be common among software providers, but subscription billing is far more business and consumer friendly. Bills from a subscription model are generally less expensive than those on a licensing one, mainly because providers are able to attract more customers. In addition, licensing fees are generally associated with on-site deployment, not the cloud-based structure that IoT and IIoT products are based on. IoT providers should structure their entire business – from sales to billing to customer support – to make the transition to IoT and IIoT devices easy for businesses. This allows companies to create solid strategies for adoption, helping them achieve success. Billing plays a key role in this endeavor, as a simple subscription billing structure appeals to a business's finance department and helps make future planning easier. 5 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

6. About the Author: Bryta Schulz Bryta joined Vindicia in 2013 and serves as Senior Vice President of Marketing. She is responsible for building brand awareness, creating go-to-market strategy and promotion, and driving growth. With over a decade of executive level marketing, product management and PR experience, Bryta has led marketing teams in enterprise technology and SaaS companies. Her experience includes heading product marketing at GoGrid, PGP, RSA and Symantec and business development and product management positions at Xcert, Thales, and Persistence Software. Bryta holds a MA in Translation from the Johannes Gutenberg University Mainz and an MBA from the University of Reutlingen. Visit our Blog for more information. 6 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

7. Thank You Like us on Facebook facebook.com/vindicia Follow us on Twitter @Vindicia Connect with us on Linkedin linkedin.com/company/vindicia © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential. 7