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

For a century, the business model for 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 how products create value over time, as software increasingly extends a device’s capabilities long after it leaves the factory.

Shure has a rich history in professional audio, best known for its microphones. Rod Behr leads their software go-to-market efforts, and he recently joined Revenera’s Michael Goff to discuss how they moved 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 innovation. 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 device makers eventually reach. When your product keeps getting better after it’s been sold, a one-time transaction isn’t enough for the value you deliver. Subscription-based recurring revenue funds the future roadmap, and this evolution is central to the digital transformation trends shaping how manufacturers are driving growth.

Moving From Hardware to Software

Converting a hardware business to a software revenue model requires a cultural shift as much as a technical one. Subscription was alien to Shure’s traditional customers, many of whom purchased equipment from a CapEx (Capital Expenditure) budget and had no obvious way to fund recurring charges.

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 need to build entitlement management and licensing systems yourself, and most companies realize in-house development risks missing a huge window of opportunity. The key to monetizing software in devices is putting the right infrastructure in place without stalling your business, which is why Shure partnered with Revenera and others.

The third obstacle 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.

Where the Value Shows Up

The payoff becomes clear when 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 new approach. “We’re building one mic instead of 10,” he says. Software has also become the driving force toward greater global consistency, with Rod noting, “What we offer in the United States is now the same as in Bulgaria.”

Then there’s the long-term product lifecycle strategy. Rod imagines future 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 trigger stage lighting changes. That kind of software-defined capability revolutionizes buying behavior. 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 requires flexible pricing tiers capable of adapting at speed – a challenge explored in beyond good, better, best with Schneider Electric.

Shure Advice

Software attached to hardware is growing faster than hardware itself across most sectors. In automotive, for instance, McKinsey projects the software and electronics market will grow at roughly 7% a year to reach around $469 billion by 2030, well ahead of the 3% 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 capturing the upside are the ones embracing digital business models.

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 extra 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. Alignment across sales, IT, finance, and product is what turns capability into revenue. In Rod’s words, “Alignment is what drives success, not necessarily having the greatest product.”

His parting advice 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 and subscription-based revenue, please reach out to our experienced team.

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