Asset tracking solution providers are increasingly becoming more flexible in offering solutions to customers.
“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.
He suggested that 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,” he continued.
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.
Opportunities
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 an 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,” Taylor concluded.
