Flexible Service Models Help WAN Asset Tracking Technology Suppliers Reach Scale

Technology suppliers are adapting their pricing levels and models to break through the barriers of mass adoption of asset tracking solutions
11 May 2021

Asset tracking solution providers are increasingly becoming more flexible in offering solutions to customers, shows a new report by ABI Research, a global tech market advisory firm. The report examines how different types of asset tracking solution providers, including hardware vendors, software suppliers, telcos, and system integrators, offer end-to-end solutions for varied markets and use-cases. The report further examines trends in pricing and business models and how each of these providers addresses various parts of the technology stack.

“The pricing of asset tracking solutions is one of the most significant barriers to adoption. Proving a business case and getting the individual components of the technology stack lined up can take many months or years – ultimately undermining adoption,” explains Tancred Taylor, Research Analyst at ABI Research. “Simplifying this process not only requires end-to-end solutions through in-house development or technology partnerships but also requires pricing models friendly to different customers’ requirements. Developments in pricing structures are designed to address these challenges by offering lower barriers to entry, with key components being simplicity, predictability, scalability, and flexibility.”

The costs of solution components have been steadily decreasing. Prices on the hardware side, the highest upfront cost, have been steadily falling, leading to an increasing number of simple devices priced at US$15 or less. Some vendors are selling devices at cost alongside a subscription to software and connectivity, while advances like low-cost smart labels, such as those announced in the Bayer-Vodafone partnership, which further decrease the hardware component’s total cost and lowering the barrier to mass adoption. The highest growth is seen in simple use-case-specific trackers as enterprises re-assess the details of their business requirements. This includes assessing factors such as the required level of positioning accuracy, battery life length, and re-usability – with each impacting the success of adoption. 

While the cost and technical capabilities of the individual solution components play an important role in proving a business case, an equally essential consideration comes at the level of the end-to-end bundled solution. Traditional capital expenditure (CapEx) models are increasingly complemented by subscription-based, ROI-based, and leasing models, emphasizing flexibility based on the industry, company size, or use-case requirements. With decreased hardware costs and smaller margins, data-centric models will increasingly appear.

“Pricing and commercialization models of solutions vary substantially between asset classes and use-cases. The value of a tracking solution is not dictated solely by the value of the asset in question, but also by the possible ROI generated. Making the ROI clear, understanding the specifics of the business application, and working as flexible partners to a customer benefits all parties in the short- and long-term,” concludes Taylor.

These findings are from ABI Research’s WAN (Wide Area Network) Asset Tracking: Pricing and Strategies application analysis report. This report is part of the company’s M2M, IoT, and IoE research service, which includes research, data, and analyst insights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis on key market trends and factors for a specific technology.


About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research 是一家全球性的技术情报公司,拥有得天独厚的优势,充当终端市场公司和技术解决方案提供商之间的桥梁,通过提供独家研究和专业性指导,推动成功的技术实施和提供经证明可吸引和留住客户的战略,无缝连接这两大主体。

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