Software Monetization Featured Article

Software Monetization in the Embedded and Internet of Things (IoT) Markets

February 20, 2015

There are few hotter topics in the field of Information and Communications Technology (ICT) than the transformative ability to embed network connectivity in all of the personal and professional devices we rely on, and the closely associated impact that this connectivity will have on what is popularly characterized as the Internet of Things (IoT).

The hype surrounding IoT seems to grow exponentially each day. Judging by what has already has been deployed in such areas as agriculture, fleet management, logistics, and surveillance, it’s clear that we are on the verge of understanding what a brave new world of high-performing, reliable, safe, and profitable IoT ecosystems might look like.

Indeed, safety and profitability loom large as major challenges. After all, without the trust created by proper security, IoT will falter, and without the means for protection, progress could be hindered. This is precisely why next-generation licensing and entitlement management matter so much as enablers of the future. In fact, thanks to increased software-centricity, the cloud, virtualization, and mobility, licensing and entitlement will matter in unprecedented and evermore critical ways; these are the final elements necessary for ensuring the success of what has been referred to as the “Internet of Everything” and the promise it holds.

As an established leader in data protection and software licensing and entitlement management solutions (aka software monetization), Gemalto (formerly SafeNet (News - Alert)) is a company with a unique perspective on how we can get from where we are today to where we want to be. In fact, in a recent video interview with ICC Media Editor Jurgen Hubner, Aurelius Wosylus, Director of Business Development, for the Software Monetization unit at Gemalto (News - Alert), shared his thoughts on where we are and the road ahead.

Viewing the embedded video is more than worth your time. In the interview, Wosylus makes several noteworthy points about what is going to be required.

Wosylus’s talk is aimed at several audiences, the first being intelligent device manufacturers and their ecosystem partners. The following list of challenges that device manufacturers face is reason enough to bookmark this article: 

  • Feature enablement – The capability of secure and remote feature upgrades.
  • Operational costs – The high cost associated with inventory, support, and shipping for a wide variety of hardware SKUs for each product line.
  • IP theft – Competitive espionage resulting in the theft of trade secrets.
  • Reverse engineering – IP theft resulting in unauthorized reproduction and distribution of knock-off products.
  • Device Tampering – Malicious or unintentional code manipulation resulting in altered functionality and regulatory non-compliance.
  • Restrictive business models – Inflexible feature management techniques resulting in limited market penetration capabilities.
  • Manual business processes – Laborious upgrade and renewal processes resulting in high support costs and a poor customer experience.
  • Integration of applications in the corporate IT infrastructure.
  • 3rd party company integration.
  • Billing and payment integration.

The below list puts into context Gemalto’s (formerly SafeNet) Sentinel portfolio of solutions, outlining the business goals necessary for success now and in the future, as well as the various capabilities that need to be addressed in an holistic manner.

Source (News - Alert):  SafeNet

As Wosylus explains in his interview, if we look at licensing and entitlement from the dual perspectives of device and OEM manufacturers, and independent software vendors (ISV), each of the capabilities are important in their own right, but they are also closely interrelated. Going through them quickly illustrates why.

The list is not in rank order, but secure licensing is rightfully at the top, because without the assurance that intellectual property (IP) can be delivered and used according to contract terms and conditions, ISVs will fear their efforts are not being properly rewarded. Conversely, users will not know if they are getting the licenses they have paid for and are in compliance.

From the perspectives of ISVs and customers, having insight to customer usage is important, to say the least, not only in terms of compliance but also product development. In a world that is moving towards software-as-a-service subscription-based models, where ease of use is an important factor, customer self-service is only going to become more important over time.

Capabilities such as feature and/or software catalog management and license lifecycle management lend themselves to agility, responsiveness, and operational efficiencies. For ISVs and device manufacturers, the focus of their business models is shifting away from hardware and onto the software used to control it. As the world becomes increasingly software-centric, developers are looking for ways to package and price their offering however they want, in line with their users’ needs. For vendors, this means substantially lower development costs and the ability to be opportunistic with new features, bundles, and pricing options. This is made possible by improving both operational efficiency and the user experience.

Another important requirement is the ability to monitor, analyze, and support every stage of the customer journey; from initiation to end-of-life upsell opportunity, such as when markets get disrupted or capabilities become obsolete. If operational excellence, customer responsiveness, and security are to be achieved, every aspect of the workflow needs to be recalibrated. This is especially true of workflows that support environments where billions of devices are connected and the amount of data being processed is enough to cause an explosion, figuratively speaking.

At the highest level, the goals are simple: provide access, options, security, and opportunities to maximize the potential of rapidly evolving markets as the world becomes more software-centric and connected. Thanks to the evolution of its Sentinel portfolio, Gemalto has become expert at visualizing the future.

It is interesting that the graphic is one of a vision, given that visibility for all concerned is foundational to maximizing the value of embedded software, and enabling IoT become massively and safely deployable and profitable in a future that is coming at us very fast.  

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