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Embedded Licensing via 'Apps on Chip' is Path to Improved Software Monetization

May 08, 2014

No matter where one looks across the broad expanse of the Information and Communications Technology (ICT) landscape, there is one immutable conclusion that can be drawn: The shift from value being heavily part of software to it being increasingly recognized that the embedded software on systems is where current and future value can be monetized is accelerating.   

In fact, embedded system developers are finding they are now really software vendors. The implications are profound. The shift is creating challenges of those slow to accommodate the operational changes needed to maximize the value of their efforts while creating incredible opportunities for those looking to next generation license and entitlement management solutions to protect their IP, reduce their costs and simultaneously gain competitive advantage.

The acceleration to a more software-centric future of value creation, and how to best profit from the opportunities it generates, is only one trend impacting embedded systems vendors. As noted, they also need to worry about protecting and fully monetizing the intellectual property (IP) already in use.

Indeed, on the latter score developers are facing problems with deliberate and unintentional misuse of their technology, tampering and theft of IP. Usage enforcement, copy protection and theft prevention can guard against these threats, but they are only the first step toward unlocking the potential value of source code.

In discussing this with Michael Zunke, CTO, Software Monetization at SafeNet (News - Alert) – the person responsible for overall security architecture and innovation in the field of software security and licensing – he said that, “At a high level, monetization of intellectual property, is the goal, and this requires a focus on both revenue and profitability. It also requires visibility of usage and control over who has access to the code, under what terms and conditions and information as to whether there is compliance.”

Zunke contined, “In a world where software truly is where value resides, having a comprehensive embedded software monetization strategy is becoming paramount. A key to such a strategy is leveraging the value of SafeNet’s recently introduced version of the Sentinel Envelope file-wrapper technology within its Sentinel License Development Kit (LDK), called AppOnChip. This is a real breakthrough in that for the first time, embedded systems developers will be able to bind protected software to hardware keys and thus eliminate artificial connections between hardware and software.”

An app approach

For those not yet familiar with AppOnChip, it is a fully automated process for binding a Sentinel hardware key to protected software. It forces selected pieces of code to execute on the key, thereby making it hard to be compromised because without the association, the software fails to execute.  In terms of protection it is another tool in the Sentinel arsenal of defenses which include: strong file encryption, code obfuscation and anti-debugging features.

As Zunke explained, the addition of AppOnChip provides embedded systems providers benefits in four key areas:

  • Protection from IP theft, tampering and reverse-engineering
  • Prevention of unauthorized product use and distribution
  • Enablement of flexible feature-level device packaging
  • Visibility and control for compliance and future product planning

Zunke says, “This is no longer about mere copy protection. It is about a holistic approach to software monetization, i.e., increasing operational efficiency and effectiveness for the vendor while providing an improved user experience with a very light footprint.”

Feature-based flexible packaging is so important because it enables embedded systems vendors to realize in their products the ability to write once and play anywhere with device functionality controlled through licensing. The same product with different functionality can be shipped to different customers at varying price points depending on features activated. It also means that customers can be upgraded remotely. This greatly lowers support and fulfillment costs while making it easier for the customer to actually use the product.

Having an effective entitlement management system to oversee such things as entitlement creation, delivery, activation, updates and usage tracking, just makes good sense. It makes monitoring compliance easier for the vendor thereby reducing revenue leakage. And if not more importantly, it enables vendors to discuss in a timely manner with their customers’ IT department, issues relating to such things as implementation or security problems whose risks need to be mitigated.

In addition, the Sentinel system is designed to seamlessly integrate with business-critical back-office systems including ERP, CRM, billing and marketing automation systems. As Zunke notes, going forward, using a next generation licensing and entitlement management system based on this integration capability will lead to automated product fulfillment, customer service and support processes. In short, the ROI calculus is only going to get better along with the customer experience. 

Edited by Alisen Downey
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