As IoT providers look to the future, appropriate packaging and licensing software can enable software vendors to deliver new experiences with even existing hardware in the field.
This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.
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This is the last article in the IoT security series, focusing on enabling manufacturers to monetise the IoT, while protecting their intellectual property.
The Internet of Things (IoT) is changing the world around us in ways never seen before. Device makers now have an abundance of monetisation opportunities, but are also operating under a very challenging and evolving business requirements. On one hand, we have customers who are demanding flexible solutions that allow them to use and pay just the features they want and when they want. On the other hand, we have an unprecedented number of 'first-time' Independent Software Vendors (ISVs) and intelligent device manufacturers coming up on the horizon, offering a range of software and cloud based services, quickly and efficiently. The competition is heating up, putting pressures on profit margins and time-to-market for traditional manufacturers.
According to Gartner, IoT represents a $1.9 trillion opportunity, but device manufacturers have yet to figure out how to tap onto this enormous market. However, with potential lucrative possibilities up for grabs, there in an increasing shift from hardware-centric approach to software-based business models. The traditional hardware-only companies, with hardware as their Intellectual Property (IP), are now moving towards software and cloud-based services. They realise that by simply producing more devices, they cannot be profitable or sustainable anymore. But, by leveraging software, they can not only control device capability and capacity, but also have greater agility to flexibly package, deliver and sell intelligent IoT solutions - not just devices.
Auto makers can now equip their cars with a flexible set of software-enabled features that can be activated or disabled on demand based on customers' preferences. Medical devices can be set up to remotely monitor patients and perform diagnostics with embedded software. And supply chain trucks can be tracked up to the minute, improving efficiency and deliveries for customers and businesses alike. Software-based approach means that manufacturers can now design flexible and seamless connected systems which create value for their customers, reduce supply chain inefficiencies and operating costs, and drive business growth and revenues. In other words, embedded software is the key differentiator in this fast-evolving world of smart connected objects, not the products.
As software becomes the new IP, software vendors now need to find ways to make money from the software applications they develop, while protecting their trade secrets. This is called software monetisation. A successful software monetisation strategy includes a combination of measures from anti-piracy and IP protection techniques to flexible licensing, pricing and packaging. According to Gartner, IoT is creating a new type of software vendor for whom Licensing and Entitlement Management (LEM) solutions is vital to protect, differentiate and monetise their offerings. They say "By monetising the software of their devices, these vendors will be able to drive recurring revenue streams, creating billions of dollars of additional value. For example, with an estimated 25 plus billion 'things' in the marketplace, and if manufacturers are able to collect an average of $5 for software from each of these installed units, that translates to additional revenue estimated at $130 billion." That is a very significant market opportunity.
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