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embedded-licensingThe “Internet of Things” was first formally recognized and named in 1999. More recent estimates expect there will be at least 30 billion fully connected devices in operation by the year 2020. If you work outside the field of smart technology, perhaps this terminology is still a bit new to you. However, as each day passes, more companies in ever more diverse fields are becoming acquainted with the “Internet of Things,” if only because it is where nearly all products are headed in a marketplace increasingly driven by Web-based communications. At one time in our not-so-distant past, social media tools were revolutionizing customer relations. Today, the “Internet of Things” is having the same effect on the products themselves. Not only can manufacturers talk to customers, but through smart software their devices can now communicate with each other and with their users.

The “Internet of Things” Defined

Technopedia defines IoT, or the “Internet of Things” as “a computing concept that describes a future where everyday physical objects will be connected to the Internet and will be able to identify themselves to other devices.” In this way, each object will have its own unique IP (Internet Protocol) address that allows it to identify itself to other objects and be identified in turn. The goal of IoT technology is to allow objects to share information and communication with other objects and their users. Many terms are used interchangeably to denote IoT, including M2M (machine to machine), telematics, telehealth and smart infrastructure. IoT devices may include refrigerators and thermostats, medical devices and testing systems and even buildings and construction equipment.

How IoT Technology Works

IoT technology depends on the use of software applications embedded into hardware objects. It is this smart software that allows various hardware objects to communicate with each other and with users. Currently these components are required to allow IoT technology to work effectively:

  • Hardware object with ability to connect to the Internet.
  • Embedded software that allows two-way real-time communication and updates.
  • Smart device to manage communications flow.

Here, it is not the hardware that drives the value of IoT technology. Rather, the embedded software has now become the primary value driver. As such, companies that have made or plan to make a significant investment into IoT technology are paying increased attention to licensure. Specifically, their focus is to ensure that their proprietary software is properly licensed and protected from alteration, hacking or theft once the software-enabled IoT object leaves their hands. This is done through embedding licenses into the software itself.

Monetizing IoT With Embedded Licenses

For IoT-focused companies, the biggest challenges come not in developing smart software or even in marketing software-equipped hardware objects. Rather, the greatest challenge is to ensure that embedded smart software generates 100 percent of the revenues its developer is entitled to. Embedded licenses work in four key areas to maintain software integrity and maximize monetization.

  • Controlling configurations. Embedded Licensing monitors two aspects of how your software is used: by controlling access to the software source code and by controlling how the software-embedded hardware is used.
  • Supporting field upgrades. Field upgrades allow a customer to decide to upgrade their software without having to send it back to the company or purchase a new piece of hardware. With embedded software licensing the company can verify the software integrity and then perform the upgrade in the field.
  • Creating personalized offerings. When your smart software is monitored with an embedded license, you are able to offer different levels of software functionality within the same essential hardware device. This allows you to market essentially the same piece of hardware with different software at different price points to remain competitive.
  • Gathering usage data. With licensing that ensures software cannot be tampered with or hacked, it becomes possible to monitor detailed usage data from the moment the object leaves the warehouse. This allows your company to learn which features are more or less popular, offer value-driven upgrade options and more.

It is smart business to ensure your company’s IoT software is protected with the appropriate embedded licenses that can guard your brand and maximize your IoT revenue streams.

About the Author: Martie Spoche holds a degree in trademark and copyright law with a minor in IT. She advises an international clientele on licensing matters across a diverse range of technology products, services and issues.

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