How Software Differentiation Strategies Help Industrial OEMs Escape the Hardware Complexity Trap

In this episode, we connect with Dale Hopkinson, senior product manager with Thales, a supplier of technologies for the aerospace, defense and security industry and a provider of cybersecurity and digital identity technologies, to learn how OEMs are leveraging modular software licensing to replace costly hardware variants, creating predictable revenue while delivering customizable capabilities to industrial customers.
Feb. 20, 2026

Key Highlights

  • Managing hundreds of product lines with thousands of components creates high development, manufacturing, warehousing and support costs that erode profit margins for industrial OEMs.
  • By building core hardware platforms with software-enabled capabilities, OEMs can offer upgrades and feature unlocks through licensing, creating predictable revenue streams beyond one-time hardware sales.
  • OEMs are adopting hybrid approaches combining flat subscriptions with usage-based and modular licenses, allowing customers to start small and expand over time while enabling manufacturers to serve different market segments.
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