Companies don’t have to choose between security and modernization. That’s true even in air-gapped environments – disconnected, physically isolated network segments. Designed to maximize security, they shouldn’t disconnect a technology company or IoT device manufacturer from revenue opportunities.
Even when systems are disconnected from the internet, hardware manufacturers and IoT device companies have the opportunity to capture usage data for the software running on those devices. Usage data-supported entitlement management and licensing automation in air-gapped environments can reduce operational overhead, improve customer satisfaction, improve competitive differentiation, and simplify license administration to improve monetization initiatives in disconnected environments. The insights answer important business questions, including:
- What is the geographic distribution of deployed software?
- Which products and features are most-used, including breakdowns by industry?
- How well are demos converting to sales?
- Where is churn taking place and how can it be addressed to improve renewal/retention?
- How effectively are entitlements managed for the customer user base – and what modernization may be necessary in this age of AI?
Highly-Secure Environments Benefit from Modern Monetization Models
No longer is a fixed-price approach – once the default for hardware in isolated settings – appropriate. Air-gapped environments – common in many highly-regulated industries, such as financial services, government, and healthcare – don’t need to forfeit revenue opportunities in the service of security. This includes use cases in medicine and healthcare (with critical health hardware, like MRI machines), industrial systems, and semiconductor equipment – all where proprietary information and safety considerations are of utmost importance.
Businesses in these industries need to look at modernized approaches, focused on the future of product usage data, to keep pace with competitors and with customer expectations. The highly-secure environments required by these industries can support varied contemporary monetization models – and overall customer success.
When customers want to pay based on their usage or consumption, unified reporting on rights and usage is essential. Those using subscription, or the increasingly common blend of subscription and usage, need clarity into their expiration dates and usage volume in order to ensure uninterrupted access to the software – and ultimately to the machines.
Particularly as AI threatens to transform the licensing landscape with seat loss and as many companies are struggling to price AI features accurately, software providers must accurately measure usage of software and devices. This is true even in occasionally connected or purely airgapped environments, where self-hosted large language models are hosted on hardware to provide AI functionality within the end organization, in order to price with usage-based models. This is made possible by data that’s been synced into a data warehouse. This use of AI, even when it isn’t provided by online LLMs, is a new paradigm for – and a new challenge to – what needs to be priced.
Unique Needs
Traditional licensing and entitlement processes often introduce friction, inefficiency, and compliance risk in air-gapped environments. Common challenges include the following, all of which undermine customer satisfaction:
- Manual processes: Tracking licenses and entitlements and billing for consumption are often cumbersome and error-prone, leading to operational complexities: problems with delivering updates that correspond with entitlements.
- Limited visibility: Data scattered across multiple systems (such as CRM/ERP) presents compliance and governance risks, with limited ability to monitor subscriptions and usage-based monetization models.
- Security risks: Outdated software versions, delayed updates, or updates performed with physical media, may expose an organization to security risks.
- Difficulty supporting modern licensing and monetization models: Lapsed subscriptions can lead to harmful service interruptions; complications in accurately measuring usage can stall revenue.
Resolving these challenges in air-gapped environments allows for contemporary monetization approaches (including subscription, usage-based, and hybrid models) in disconnected environments – just as customers have come to expect in connected scenarios.
Address the Airgap
By adopting flexible licensing, improving data collection, and automating entitlement and software update processes, organizations running software in airgapped environments can reduce inefficiencies, enhance compliance, and deliver a better customer experience.
Teams should:
- Treat air-gapped customers as a monetization opportunity rather than an exception, ensuring secure environments benefit from modern licensing, updates, and customer success initiatives.
- Assess current licensing and entitlement processes to identify manual tasks, customer pain points, and operational bottlenecks.
- Evaluate whether existing monetization models align with customer expectations, particularly for subscription, consumption-based, or hybrid offerings.
- Apply software usage analytics to air-gapped environments for clarity into usage across demographic considerations.
- Address AI-driven considerations to ensure accuracy of expenses related to AI-driven functionality.
- Invest in automation to reduce reliance on manual license fulfillment, renewals, and compliance tracking.
- Improve business decision-making and customer understanding by refining strategies for collecting usage and entitlement data from air-gapped environments – and sharing the data within the business.
Disconnected environments can prove to be a strategic advantage – not a monetization constraint. Modernizing monetization in air-gapped settings enables companies to drive recurring revenue, gain actionable insights, improve compliance, and deliver a better customer experience for the long-term – without compromising security.
