From Hardware to Software: Lessons from Shure’s Digital Evolution

For a century, the business model at most device manufacturers was relatively simple. Build something excellent, put it in a box, and sell it. The product was finished the day it rolled off the line. That model still works, but it no longer reflects the extent of where value is created, as software increasingly shapes a device’s capabilities long after it leaves the factory.

Shure is a 101-year-old company best known for its microphones. Rod Behr leads their software go-to-market efforts, and he recently joined Revenera’s Michael Goff to discuss what it really takes to move from hardware to software.

Watch the recording and read a breakdown of key insights below.

Software Hits a New Note

Shure’s shift from hardware to software didn’t start with a monetization strategy. It started with capability. Rod describes ceiling array microphones that use software-defined “lobes” to isolate specific sounds while filtering out noise. That kind of precision can’t be built into fixed hardware. It has to be delivered, tuned, and improved through software over time.

Once you’re shipping continuous improvement, the old commercial model breaks. As Rod puts it, “The mic might be finished, but the software that drives it is continually improving and we are continually sending updates. We needed to have the ability to monetize that software and be able to properly support it financially so that we could continue improving what we were doing.”

This is the pivot point every device maker eventually reaches. The moment your product keeps getting better after the sale, a one-time transaction stops paying for the value you keep delivering. At that stage, recurring revenue is what funds the roadmap. Revenera sees this pattern constantly across connected products, and it’s central to the wider digital transformation trends reshaping how device manufacturers think about growth.

Moving From Hardware to Software

Transitioning from a hardware to software mindset requires an operational and cultural shift as much as a technical one. Subscription was alien to Shure’s traditional customers, many of whom bought equipment out of a capital budget and had no obvious way to fund a recurring charge for operating expenses.

The second challenge was internal readiness. Shure’s back-office infrastructure couldn’t handle subscriptions without a project that would have consumed its entire IT team for well over a year, so they partnered with Revenera and a merchant of record to accelerate time-to-market.

You don’t have to build entitlement management and licensing infrastructure yourself to start capturing recurring revenue, and for most companies the time it takes to build in-house means missing the window entirely. The key to monetizing software in devices is putting the right infrastructure in place without stalling the business while you retool, which is why Shure partnered with Revenera and others.

The third challenge for Shure was culture. As Rod puts it, “Software is never done. Hardware is done.” For a company that takes deep pride in shipping only finished, best-in-class products, the idea of releasing software that would never be truly complete challenged Shure to its core. Leadership had to accept that a microphone gaining new capabilities through software becomes more valuable over its life, not less finished.

Constant improvement is the point, not a sign of a flawed product. Making that leap is less about technology and more about adopting digital business models that reward ongoing value rather than one-time sales.

Where the Value Shows Up

The payoff becomes clear once you follow Rod’s examples. Shure now handles regional wireless variations in software rather than manufacturing physically different microphones for different markets, replacing a logistics headache with a licensing decision. “We’re building one mic instead of 10,” he says. Software also became the force pushing Shure toward global consistency, insisting that “what we offer in the United States is the same as what we offer in Bulgaria.”

Then there’s the long-term product lifecycle strategy. Rod imagines microphones as diagnostic tools that could one day identify a failing engine or an irregular heartbeat, in addition to recognizing individual voices and audio cues to change lighting on stage, for example. That kind of software-defined capability changes buying behavior entirely. Customers begin asking what a device will be able to do in five years, and they invest accordingly.

It also raises the stakes on packaging, since a device that keeps evolving needs flexible pricing tiers that are capable of changing accordingly – a challenge explored in beyond good, better, best with Schneider Electric.

Shure Advice

Software attached to hardware is growing faster than the hardware itself across most sectors. In automotive, for instance, McKinsey projects the software and electronics market will grow at roughly 7 percent a year to reach around $469 billion by 2030, well ahead of the 3 percent growth expected in the broader vehicle market.

The direction of travel is the same everywhere. Value is migrating from hardware to software, and the manufacturers who capture it are the ones who build the commercial engine to match.

Recurring revenue only works when licensing, entitlement management, and billing systems can deliver what Rod calls the on-demand “Netflix experience,” where a customer who needs 16 more audio channels an hour before showtime gets them instantly rather than waiting for a package in the mail.

Flexible monetization models matter more than any single pricing choice, because perpetual, subscription, and consumption-based pricing increasingly coexist within the same portfolio. And alignment across sales, IT, finance, and product is what turns capability into revenue. As Rod noted, “alignment is what drives success, not necessarily having the greatest product.”

His parting advice is the most quotable of all, and it applies whether you make microphones or medical devices. “Don’t be scared to buddy up. No matter how big you are as an organization, if you don’t have the skills, be honest enough to notice that. If you wait to grow your own skills organically, internally, you may well miss the bus.”

If you’d like expert advice on moving from hardware to software monetization, please reach out to our expert team.