Understanding John Deere's New License Model for Technology

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Tony Kramer: At the end of this episode, hear I special message from John Deere on the new Licenses Tool in the Operations Center.

Hi, I'm Tony Kramer, your host of the Agriculture Technology Podcast, and I'm sitting down with agriculture technology and equipment experts to help you enhance your operation for today, tomorrow and into the future. In this episode, I talk with Joel Kaczynski about the John Deere license model for technology. With that, let's dive into the show. Like I said, I'm sitting down here with Joel Kaczynski. Joel, you are a multiple time return guest here on the show. Why don't you just remind our listeners who you are and what you do here with us at RDO Equipment?

Joel Kaczynski: Thanks, Tony. Glad to be on here again with you. My name is Joel Kaczynski. I've been with RDO Equipment for 20 years now. Over the 20 year period, I've had many roles within the company from sales with the self-propelled sprayers to managing our location down in Breckenridge, Minnesota, to getting deep into the precision ag with the product specialist team. I'll continue to work with the technology as a manager with it and continue to support it from the background.

Tony: Again, welcome back to the show. I know we were talking about a pre-meeting before we scheduled this or before we recorded this, that some of the stuff we're going to talk about today has been around for quite a while, actually. There may have been some name changes over the time, but what we're talking about isn't necessarily new. That's discussing the license model when it comes to John Deere technology. Let's take some steps back and just talk about what is the John Deere license model or what is a John Deere license?

Joel: I'll probably take it back in time when John Deere first started to get into technology and take it back to the to the GPS receiver, the StarFire receiver, specifically when they released that with the AutoTrac. They came out with a higher level accuracy with the receiver where you could get pass to pass accuracy with SF2 subscription model. That was really, from my recollection, when John Deere came with activations and subscriptions. These StarFire's Gen 2 receivers would have a activation on them that enabled them to use a StarFire SF2 subscription.

There's also it took some-- a lot of times customers to explain to them that, "Hey, there's an activation that gets put on that receiver that enables it to have the SF2 subscription." Every year they have to renew the subscription, but they also needed that activation on there as well. That was, my recollection, the first having activation subscriptions. I think back in those days, too, we called it, what, Tony, the brown box.

Tony: Yes. We had the brown boxes, the original Greenstar displays that are still in use today. I know there's still some customers out there, but that's really why when I started talking about this, the license model, yes, there's some different terminology. Like you were saying, back in the late '90s, early 2000s, when this technology started to become in use, it was we were referring to it as activations or subscriptions.

Now it's really the same thing, but we're just changing the terminology. Then there's a number of different solutions or offerings that we can dive into now. Going from activations and subscriptions to licenses, there's really-- you and I decided there's three types of licenses. Let's talk about those three being permanent, time-based, and use-based. Let's give our listeners a little bit of an explanation on the differences between those three.

Joel: John Deere had to get up with the times as far as with where technology is going. Transitioning to this license model enables to handle the different types of license between permanent, time-based, and use-based. Use-based being the new one that is coming with the newest technology that we have today. We can look at the permanent license. I would say that's very similar to what our activations were before. However, sometimes a permanent license can be moved from a display unit to another. Most of the time, the permanent licenses remain on the command center like in the tractor or remain permanently on a G5 display, hence the name permanent license.

The time-based ones, also known as a subscription previously, all those are all time-based. You purchase that, you can renew them, and they'll have an end date that license will end. The most familiar that our customers are with it are with the StarFire receivers, whether it's an SF2 subscription to the SF3 subscription. Now we have the SF-RTK time-based license that's on there.

When you look back at the older technology on that, whether it's the StarFire 6000, StarFire 3000 with SF3 subscription, we also call those time-based license now. It gets a little confusing, but we do our best to work with the customers and help them understand as some of this terminology was changing. Then we'll get into the new use-based licenses that are coming, and that's with the newest technology that's coming today. The first that we saw the use-based license be utilized was this past year on the See & Spray model. It's based off of acres sprayed. There's different ways that could be used. Right now, acres is how we're doing on our See & Spray business model.

Tony: Taking a step back to that time base, like you were saying, the SF2, SF3, SF-RTK, we've had time-based licenses, or we referred to them as subscriptions in the past. Now they're just called a time-based license. Whether it be that receiver license to get that level of accuracy that you're looking for, we also had it. It was introduced to the displays-

Joel: That's right, Tony.

Tony: -on the Gen 4 when Deere released the Gen 4 4640 Universal, we had the ability to get those subscriptions is what we were calling them. Now they're just referred to as time-based licenses. Then you moved into the use-based license. That's something that's going to be new. That is one of the biggest pieces to this or the new pieces to everything we're talking about here is the use-based license.

You mentioned that today it's going to be acres covered. Whether it's See & Spray or ExactShot on the planter, maybe it could be used in a different manner in the future. We're not sure. Today, it's all talking about acres covered. There's one unique piece to that, because with the See & Spray technology or the ExactShot technology, being that it's use-based, you don't have to pay anything if you're not going to use it. Correct?

Joel: Yes, that's correct, Tony. The business model that John Deere's developed and continue to develop and we're working with our customers on it is that John Deere will invoice you the amount of acres that were sprayed after you sprayed it. The prior year, the customers were buying these units ahead of time, but going forward is actually after you use them on a monthly basis. That is what the business model will be for the 2025 growing season.

Tony: Let's dive a little deeper into that, Joel. Some of you may have heard talking about John Deere direct billing the customers or things like that. You may be in conversation with your local John Deere dealership or your local RDO product specialist about making sure you're getting your operation center set up, things like that. Let's talk a little bit more about this direct billing business model, and exactly what you were saying, what John Deere is doing, how it's going to be rolled out, what technologies are utilizing it, and then let's key in on that importance of the operation center being set up so that the customer can get the bill in the correct manner.

Joel: We've had a lot of focus on it right now on account setup. A lot of our customers, most of our customers a day, any customer that purchases a piece of equipment with telematics, with JDLink system on it, need an operation center set up for that. A lot of those were set up and over time realized that we needed to make sure that from a data privacy standpoint that the owner had the right permission set up on it and had the right control over it. Now as we transition into these licenses being tied to these op center accounts, it's very important to make sure that the legal entity of the individual is tied to that as well.

For instance, when direct billing starts happening, we want to make sure that the information is as accurate of location where the customer lives from a tax standpoint. Different states have different tax laws around some of these licenses, so you want to make sure that that's accurate, that's in there, and that the right person is being invoiced for that. The team here at RDO, we've been working hard with the field team. Everybody who works with the customers with these accounts and the equipment, we're doing our due diligence to helping the customers get things set up.

It actually takes a phone call of the customer to John Deere to make sure things are set up properly. The situations that we've gone through so far, our precision products specialists and/or the account managers are working directly with that customer and help them get the right information they need with their equipment and reviewing that operation center account, how it's set up, who has access, what are the permission levels, all that.

It just continues to be more and more important every day that the accounts are set up properly, permissions are set up right, who has access to that information that's in your op center account. It's just good to do that good review with the team here at RDO to make sure that things are working the way they should be.

Tony: Yes, absolutely. You alluded to it about making sure that it's set up properly so that you're getting billed properly based on how you're utilizing the technology. It's really, yes, there's a direct billing factor to if you are utilizing technologies like See & Spray and ExactShot today. Now, I know there's going to be some use-based fees or use-based licenses for more technology in the future. Today, we're utilizing any of the See & Sprays, as well as ExactShot on a planter.

Not only is this an opportunity to get in, make sure everything is set up. You talked about the legal entity name, so that you are getting billed appropriately. It's also just a good time to go through your operations center, work with your precision ag specialist, your product specialist here at RDO, and just make sure everything is set up properly in the operations center, you're good to go for the season. In part to that, you'll be set up for this direct bill.

Now, we talk about direct bill. If I were a customer and I had See & Spray or ExactShot, what does this in season-- Say we've got our operations center set up, our organization is in good standing, and we have all that done, how does this look? I go out and I use one of these technologies, or I choose not to, say, in a See & Spray situation, I go spray one field, and we've got-- It's 100-acre field, I spray it. Now the next two fields I go to, I decided I'm just going to be broadcast spraying. How does that look? What am I getting billed for? What am I not getting billed for in that scenario?

Joel: The See & Spray model for 2025, when the system is turned for a field for the target, when you're targeting just weeds, what you're going to get invoiced for is when it is not spraying. If you have a field that 25% of the field did not get sprayed, because there's no weeds there at all, you'll get invoice for those acres of that did not get sprayed. It is easier to determine your ROI. You know what your cost for your pesticide that you're using, you know what that dollar per acre is. You can quickly determine what's my ROI on this field using the technology. It's easy to understand.

What John Deere does then is add up all the acres as the system was turned on and that we're not sprayed in that field. The customer will be invoiced for those. You have the ability to go into operation center and a customer will look at the reports and see how many acres are in there. You'll get a report from Deere, I believe, via email, with verifying, "Hey, here's what we show." There's full transparency around what you're doing. It'll be our first year with this business model. I'm sure there'll be some hiccups to work through. I'm confident in the team that we have here at RDO to make sure our customers are set up and that it's a smooth process for them.

Tony: Then the other technology that's going to be in use in 2025, ExactShot on the planters. We've got the fertilizer system where we are dosing fertilizer only on the seed. Is that a similar situation where we're only going to get billed for when we're utilizing that technology?

Joel: Yes, correct, Tony. In that situation, when the system is turned on and dosing the fertilizer or crop nutrients, whatever you put or protectant just on the seed, you'll just be invoiced for when that is used.

Tony: Then if we go to the next field, we decide to turn that technology off, we just want a continuous flow, we don't get billed for those acres.

Joel: Yes.

Tony: It's really trying to make the whole process easier with John Deere, direct billing the customer on-- I believe on a monthly basis is when they'll see it. That is how this direct billing is going to work. That is why we need your operation center set up properly to make sure you've got everything covered. You know what you're doing. We've got that legal entity input properly, and that is ready to go ahead of the season. Like you said, this will be the first season we're doing it, 2025. It's going to be new to us. It's, of course, new to John Deere, new to the customers. We'll learn as we go. It's going to be a change. It's going to be a shift, but it's all for the better in utilizing these advanced technologies.

Now, I also want to talk about, when we talk about these licenses and whether it's a permanent license or the activations back in the day, or it's a renewable license or the subscriptions back in the day, we still have some customers that would just prefer to have some of their stuff be permanent. Now, we still have some, not all, but we have some options with the ability to get either a renewable time-based license or a permanent license in terms of some of our displays. Let's talk about that difference in terms of purchasing and which route is the right route for you.

Tony: It's great to get into this to look at-- Let's take a step back and look at the bigger picture of it, of really the theory behind these licenses. You have to look at it from where you're actually getting the cost of the technology in a time-based license, again, is spread across the time when you use it. It's lowering your upfront costs, but every customer is a little unique with-- We have ones like, "I'd rather just pay for right now and have everything on it." Others are like, "No, I don't need that. I'm just using it for this application." What it really does is it is lowering that cost to get into it. They have a potential to.

A good example of this was a John Deere Essentials Kit that was released last year. It's a G5 display that does not come with permanent activations on it. You get a StarFire receiver with it as well, and a JDLink modem. Prior to the Essentials Kit coming out, the G5 displays were coming from factory in the base code with AutoTrac on them. That the AutoTrac was actually permanent, as an example, on that G5 display. You buy the Essentials Kit, that AutoTrac is a annual renewable license, formerly known as subscription, that gets put on that display.

It really gives the flexibility to the customer with how they want to use the product. Some things are bundled together, some things aren't. There's not a perfect match for every single customer, but we definitely can find situations that are going to work, try to make that right fit within the operation with the technology that the customers are using. As those customers adopt more technology in the farm, they have the hardware and the systems that can enable that technology in the future. Will there be a cost with a potential renewable license on there? Yes, but at least they're not starting from scratch. They have the foundation set with the technology there.

Tony: You said it there about there's not necessarily a perfect solution or there's not a one-size-fits-all. We know every farm is different. Every farm utilizes their technology in different manners. They utilize their machines in different manners. It all really comes down to your operation. How are you going to utilize this technology? Whether it makes more sense to get an essentials, a precision ag Essentials Kit, low cost of entry. You only pay for the technology that you're going to be utilizing, or if it makes more sense to just get a standard G5 Plus with that permanent AutoTrac license, every farm is going to be a little bit different, whether you're looking for section control or AutoTrac Turn Automation with implement guidance, whatever it may be.

There are different purchasing options out there for everybody to make use of the technology that you're going to use on your farm. That, I think, is one of the big things with the renewable licenses or even some of the permanent license is Deere has now made a shift in only utilizing or only activating the technology that is in use on that specific machine. Take a combine, for instance, you're not going to use section control on a combine. That type of technology on the G5 family moving forward, that section control is not something that would be offered or purchasable on a combine because you're not going to use section control on a combine.

Things are changing. I think we're moving into the direction of really only getting the technology that you need for that specific operation or your operation and that specific task on the farm. A lot of different things out there, which brings me actually to my next point about customer visibility. We know, in the future here, it, it's going to-- some of the visibility is going to open up. Where can our customers go or is there anywhere they can go today or in the future here shortly where customers can see, what activations, what licenses do I have? What do I need to renew? Things like that. If I were a customer, how do I know what I have on the display?

Joel: Great question, Tony. John Deere, how we've been managing and handling all of our activations and subscriptions and licenses here up to this point has been through a system called StellarSupport. It's a web-based platform. Customers also do have access and visibility of their precision ag hardware in there. Their equipment also shows up in there with the telematics with the JDLink enabled in it. You can see what licenses, activations, when the time-based licenses is ending. All the visibility is there. That's handled every product that we have that has them is in there today. Going all the way back to the 2630 display, they're in there. The StarFire 3000s, they're in there.

That's StellarSupport. You can see what permanent licenses are on there, and also any renewable and the dealer. We use that to manage. We can purchase them for the customers through that system. Going forward, John Deere realized that the technology of future, they're going to need more features and more scalability to be able to manage where these license models' going. Previously, StellarSupport site was working parallel to the Operations Center. Operations Center where everything's at, but yet you couldn't see what licenses you had through the Operations Center.

This winter, they're going to release License Manager. I should say it has already been released. They're using Ops Center PRO in there. Was for ag retailers that they were using in there. That was the first license that was put in that. They're going to launch-- This winter, they're going to add in the G5 displays and the License Manager. It's going to be tied right to our customers Ops Center account. They're also going to add in the StarFire 7000 and 7500 with renewing the SF-RTK renewable license. Those products will show up in the Operations Center under a new tab called License Manager that's going to be in there.

There'll be some added features that our customers will be able to do with that to come, versus what you could do in StellarSupport. It really just closes that loop of the system. Everything is in the Operations Center ability to see what license you have on there. I can't emphasize enough. We work with our field team with this with our customers of understanding what's the scope, what do you have of your renewable licenses that need to be renewed? When do they expire? Is it going to be run in the middle of the season?

I can't emphasize enough to work with your precision product specialist with RDO or account manager and understand what license they have. Do I need to upgrade something? Really do a deep dive in that. It'll make the spring planting go so much smoother. There's nothing more frustrating for a customer to be going out to that field, getting the headland and he AutoTrac doesn't work. There's nothing more frustrating than that. We do our due diligence working with you guys, with all of our customers to make sure that doesn't happen. We get things set up ahead of time or have a plan. I'm excited about these tools coming in operation center to help us manage that. I think it's going to ease that as well going into the future with that.

Tony: Yes, absolutely. Like you were saying that just the visibility from a customer standpoint, being able to know and understand what you have on your displays, your receivers, whatever that may be, John Deere License Manager is going to open up that visibility. The customers can go in. Like you said, we do the best we can from a dealership side to stay ahead of this proactively. We don't want you sitting on the headlands of the field, just as much as you don't want to sit on the headlands of the field. I know not everywhere in the world has the downtime or the off season when it comes to winter.

I encourage you to, when you do have that lull or that break in your growing seasons, to take the time to review your licenses, review what you're doing with your technology so that you can move right into that next growing season, whether you have a couple months off for the winter, or maybe you only have a week off, as that field gets prepared for the next growing season. Do your part. We will do our part as from a dealer side. License Manager is definitely going to increase that visibility on what is in your organization or your operation.

Now, I know there there's so much to talk about here, Joel. We could go on and on and on, but we really just wanted to cover high level, what this license model is. Yes, it's a little bit different, but it's not drastically different from activations and subscriptions in the past. Just some terminology changes, a few things different in terms of what technologies you're utilizing. Of course, we've got the introduction of the use based license with See & Spray ExactShot and some other technologies coming in the future.

We, hopefully, with what we talked about here, it's going to spark some interest or you'll go in, you'll talk to somebody. Joel, if somebody wants to learn more, one of the listeners needs to know more, they're curious, they want to get right on their operation, where can they go? Who can they talk to to make sure they're moving into the 2025 growing season in the right place?

Joel: I'd say for that personal touch, definitely reach out to your RDO account manager or your RDO precision product specialist. They have the understanding and ins and outs of everything when it comes to these new licenses. Also, John Deere does a phenomenal job with their website, and drilling into any of the new precision technology coming out. There's lots of information there, and YouTube that they put out there, as well as RDO. We do as well put information through our RDO YouTube channel and this podcast. Definitely, do not hesitate to reach out to your account managers and precision product specialists to ask these questions.

I'll go in the spring, each region a little bit different, but there's customer clinics come out with certain things. I know especially with the See & Spray model, we have a high-- We really want to make sure our customers are having a good experience with that. That's a technology that if you don't like it and it isn't working for you, you don't think it's working for you, you're not going to use it. You have control over that. We want to make sure that it is paying for you and make sure things are working and set up properly. We have some focus going into the spring in the regions around that technology of making sure those customers are set up right and they are getting the value out of it. Because if they're not, you're not going to turn it on.

Tony: Yes, absolutely. Like you said, Joel, attend customer clinics. Customer clinics in your area, attend them. Ask the questions. Usually those product experts are there at those clinics. They're the people to ask, the people to question. Attend your local customer clinics. Ask the questions. Reach out to your salesman or account manager here at RDO Equipment and prepare yourself. Best prepare yourself for the upcoming season or continue to work through that.

Joel: Also, I'd add to we have the RDO Support Center, too, that 844-551-0391. That team, they're up to speed on this. I do a lot of work with our internal trainers and with that team. It's really neat. We work as an entire team together to support as those calls come in and working with the field. Definitely leverage that, too. They're all up to speed on these new licenses, the new technology with the time-based. Reach out, use that as a resource as well to get you through this growing season.

Tony: I just want to thank you, Joel, for taking the time to sit down and chat with me a little bit about the new John Deere license model. I know, like I said, we could go on and on and on about this. There's a lot of different avenues, a lot of different things to talk about. Hopefully, we shared enough information to get you curious, get you thinking. Thanks again for doing this.

Joel: Thanks, Tony.

Tony: And now, a message from John Deere.

John Deere Message: Hi, this is Kyle, and I'm excited to share some news  about the latest release of the Licenses Tool in the Operations Center. Get ready for the upcoming seasons by ensuring you have the necessary technology. The Licenses Tool allows you to easily view all your G5 Display and StarFire 7000 and 7500 Receiver licenses, helping you identify any that are expiring soon for a quick renewal with your dealer. Plus, new self-management features enable you to transfer licenses between organizations and manage license assignments across all of your equipment. Take charge of your licenses and ensure you're ready for the season ahead. Thanks for watching.

Tony: Please take a moment to subscribe to this podcast if you haven't already. You can subscribe to the show on the many different podcasting apps that we're streaming this out to, such as Apple, Google, Spotify, as well as many others. While you're out there, drop us a review. We'd love to hear what you think about the show. Lastly, make sure to follow RDO Equipment Company on Facebook, Instagram, and X. Also, catch our latest videos on YouTube. You can also follow me on X, at RDOTonyK.