gareth noyes director, corporate operations wind river systems, inc. next generation pricing...
TRANSCRIPT
Gareth NoyesDirector, Corporate Operations
Wind River Systems, Inc.
Next Generation Pricing Next Generation Pricing StrategiesStrategies
Vision, Challenges and Best PracticesVision, Challenges and Best Practices
What We Do: Device Software OptimizationWhat We Do: Device Software Optimization
Wind River enables companies to develop and run device software faster, better, at lower cost and more
reliably.
Customer MomentumCustomer Momentum
Networking Industrial & Automotive Aerospace & Defense Digital Consumer
AlcatelCiscoEMCEricssonFujitsuHitachiHewlett-PackardHuaweiIntelJuniperLG ElectronicsLucentMarconiMotorolaNECNokiaNortelSiemens
ABBAgilentBoschFanucGEHitachiHoneywellMitsubishiNational InstrumentsOmronRockwell AutomationSamsungSchneiderSiemensTektronixTokyo ElectronYokogawa
BAE SystemsBoeingEADSEuropean Space AgencyGeneral DynamicsHarrisHoneywellIAIKHILG InnotekLockheed MartinL3NASANECNorthrop GrummanRaytheonThalesSmiths Aerospace
AlcatelBMW CanonEricssonFujitsuHewlett-PackardHitachiHondaKonica MinoltaLG ElectronicsMatsushitaMotorolaPhilipsPioneerSamsungSeiko EpsonSonyThomsonToshiba
300 Million devices worldwide use Wind River technology
37% 20% 24% 19%
Challenges for GrowthChallenges for Growth
PRODUCTS– “Chinese Menu” commoditise value
SALES– Transactional, project-based approach
BUSINESS MODEL– Rigid: perpetual, project-based– Unpredictable, difficult to forecast
OPERATIONS– Transactional
Horizontal,“One-size-
fits-all”
Our ResponseOur Response
Market-specific product offering
Focus on Enterprise-level standardisation
Expanded business model, licensing options– Subscription business model– Unique-User licensing option
Operational focus on ease of doing business– Assist customers with compliance– Entitlement varies over time
Today:Today: Wind River Business Model Choices Wind River Business Model Choices
Business Model License ManagementOptions
Production LicenseOptions
Subscription
Perpetual
Node-Locked
Floating
Unique User *
PL-FREE
Quarterly in Arrears
Block Purchase
Block Purchase
Per Unit
Node-Locked
Floating
* Utility pricing, requires reporting
Business Model AdoptionBusiness Model Adoption
Launched November 2003
FY05 revenue of $235.4 million– Revenue growth of 15% year-over-year– Record subscription revenue of $49 million—
156% growth year-over-year
Deferred revenue balance of $77.1 million– Increase of 97% vs. ending FY 2004 balance
Insights / Lessons LearnedInsights / Lessons Learned
Treat business model & licensing options as you would a product line– Roadmap, transitions, migration paths
Align pricing / licensing with value
Understand the implications– Revenue– Company-wide commitment– Change Management– Reporting trepidation
Operationalise business model: process integration– Many more licensing touch-points
New Challenges: New OpportunitiesNew Challenges: New Opportunities
A new business era– Compliance & controls
Open Source– Changes vendor value proposition– Community licensing terms
Innovation vs. standardisation
Accelerating software commoditisation– Open source & standards
Licensing / Packaging TenetsLicensing / Packaging Tenets
Installation / use to match business model
Make licensing transparent to developer
Restrict enable & control
Make compliance easy
Self-service licensing cycle
Product Installation ParadigmProduct Installation Paradigm
Developer
System Administrator
ServerWind River
License Servers
DeveloperDesktop
1 INSTALL & DEVELOP
Select either temporary or permanentEnter installation code (LAC) & user detailsReceive automatic 30-day licenseUp & Running
2 COMPLETE SETUP
Migrate to license server when readIssued new license file: port@server
3 UPDATE
Download patches, updates
1 LICENSE SETUP
Receives entitlement certificate w/ shipmentUse PAWS to generate license filesCommunicate availability to installed developers
2 ENTITLEMENT
Redeploy licensesManage renewals, upgrades
3 COMPLIANCE
Report usage
ESD
MediaKit
Customer BenefitsCustomer Benefits
Reduction in licensing administration
Improved time to productivity for developers
Greater visibility / control over software deployment– Track and manage licenses– Measure compliance
Insights / Lessons LearnedInsights / Lessons Learned
Standard ERP & CRM packages do poor job of managing intangibles– Entitlement = tangible x licensing
Customer role segmentation– OOB lifecycle analysis post shipment
Customer self-serve when they can
Gain greater insight into software deployment habits