S3Corp. Tech Blog

Securing IoT Intellectual Property

Understanding IoT and Its Rapid Growth

The Internet of Things (IoT) connects physical devices through embedded software, allowing seamless data exchange and remote access. As the IoT expands, businesses and developers are embracing its potential, leading to a surge in demand for innovative solutions. Independent software vendors (ISVs) play a critical role in this ecosystem by delivering products and services tailored for IoT environments. However, with the increased reliance on software within IoT systems, protecting intellectual property (IP) has become a significant concern.

ISVs must address challenges such as security vulnerabilities, counterfeiting, and unauthorized use. By implementing robust software monetization strategies, ISVs can not only safeguard their IP but also unlock new revenue opportunities. Various tools cater to the specific needs of IoT, providing solutions for IP protection, monetization, manufacturing control, inventory management, and system integrity.

The Role of Software in IoT

IoT is transforming how industries operate by embedding software into devices, creating dynamic systems that enable smarter decision-making. As more devices connect, consumer and enterprise expectations for affordable, fast, and flexible solutions grow. Software monetization tools offer ISVs the ability to protect their IP while meeting these demands.

Eric Free, strategic growth senior vice president at Flexera Software, notes that the software embedded within physical devices often defines their value. He emphasizes that as manufacturers increasingly adopt IoT, they integrate software across multiple layers of their solutions, generating significant business opportunities. These opportunities stem from software applications, cloud-based management tools, and detailed data reports.

The extraction and utilization of data are among the most valuable features of IoT. Devices generate vast amounts of information, and software monetization ensures this data is efficiently captured and monetized. Brendan O’Brien, co-founder and CIO of Aria Systems, highlights that the potential lies in how data is extracted, analyzed, and used to create actionable insights. Furthermore, IoT software enhances convenience by providing cost-effective updates compared to traditional electronics or mechanical upgrades, as noted by Marcellus Buchheit, CEO and president of Wibu Systems.

Addressing IoT Security Challenges

While IoT offers unparalleled opportunities, it also presents significant risks, particularly in security. Protecting sensitive information and maintaining operational uptime are ongoing challenges for ISVs. Software monetization tools help address these concerns by offering advanced IP protection, secure licensing mechanisms, and anti-counterfeiting measures.

A survey by Gemalto, conducted by Vanson Bourne, revealed that 84% of IoT software vendors and enterprise users are concerned about software compromise. To mitigate these risks, ISVs often develop a single comprehensive software program and utilize software monetization to activate specific features or licenses based on customer needs. This approach reduces development and management costs while maintaining high-security standards.

Tamper-resistant applications and layered security measures are essential for safeguarding IoT devices. ISVs must also implement rapid update capabilities to address vulnerabilities promptly. According to Free, building secure applications requires proactive measures to prevent hacking, ensure compliance, and protect customer data.

O’Brien draws attention to the high-profile cyberattacks on entities like the Democratic National Party and DYN servers, emphasizing the importance of enterprise-grade security. For ISVs, this means proactively minimizing risks while providing reliable and secure systems to clients.

Monetization Strategies for ISVs in IoT

ISVs leverage IoT to capitalize on its vast data collection capabilities. By analyzing telemetry and usage data, ISVs can develop analytics tools, reporting applications, and subscription-based services that deliver value to customers. For instance, Netflix uses data analytics to offer personalized recommendations, demonstrating how IoT-enabled solutions enhance user experiences.

Recurring revenue models are disrupting both consumer and industrial sectors, as highlighted by O’Brien. Instead of focusing solely on the device’s selling margin, ISVs can explore subscription-based services and other recurring revenue streams. Gemalto’s survey found that 70% of respondents believe IoT offers significant monetization opportunities, particularly as software consumption extends to individual consumers.

By incorporating value-added services into their offerings, ISVs can create tailored solutions that appeal to diverse customer needs. This approach not only boosts revenue but also fosters long-term customer loyalty.

Strategies for Protecting Intellectual Property

To secure their IP, ISVs employ multiple strategies, including licensing mechanisms that restrict software access to authorized users. Free suggests tracking software usage, integrating call-home compliance functionalities, and building tamper-resistant applications to deter hacking attempts. Additionally, self-updating capabilities and effective management of open-source software (OSS) are critical for maintaining compliance and safeguarding IP rights.

Buchheit observes that IoT devices often adopt open architectures with standardized operating systems, making them vulnerable to hacking. ISVs face the challenge of implementing security measures to prevent license copying and enable secure online license transfers. Steel also highlights other threats, such as software piracy, reverse engineering, and trade secret theft. Gray market activity, where devices are sold outside authorized distribution channels, poses further risks to ISVs, damaging brand loyalty and disrupting pricing schemes.

Platforms Supporting IoT Monetization

Several platforms offer solutions to help ISVs navigate IoT monetization and IP protection. Aria Systems, for example, provides a cloud-based platform that enables customers to choose how they consume products and services. This flexibility extends to custom bundles, promotions, and real-time insights into customer behavior, driving higher engagement.

Flexera’s FlexNet Licensing platform supports software monetization through entitlement management, automated updates, and compliance solutions. With over 20,000 applications using its platform, Flexera offers scalable tools for ISVs across industries. Free highlights that these solutions help businesses adapt to market changes and maintain a competitive edge.

Gemalto’s Sentinel product line delivers licensing, protection, and entitlement management services for IoT environments. The platform accommodates both connected and disconnected setups, providing ISVs with the flexibility to explore IoT offerings while maintaining traditional solutions. Meanwhile, Wibu Systems’ CodeMeter platform focuses on secure licensing and encryption, ensuring robust IP protection.

Real-World Application: PolySync’s Success Story

PolySync, a technology company specializing in autonomous vehicle systems, sought an IoT monetization solution to streamline its back-end infrastructure. The company required a licensing and entitlement management system capable of automating software delivery, supporting scalability, and accommodating a diverse customer base.

By partnering with Flexera, PolySync implemented FlexNet Licensing, FlexNet Connect, and FlexNet Operations. These tools enabled the company to protect its IP, automate updates, and provide self-service capabilities for customers. PolySync’s autonomy operating system exemplifies how ISVs can leverage software monetization to drive innovation and efficiency in IoT applications.

The Future of ISVs in IoT

As IoT continues to evolve, the role of ISVs becomes increasingly vital. From extracting valuable data to addressing security challenges, ISVs have a unique opportunity to shape the future of connected technologies. However, they must remain vigilant in protecting their IP and adopting strategies that ensure sustainable growth.

By leveraging software monetization tools and exploring innovative business models, ISVs can thrive in the competitive IoT landscape. The integration of advanced licensing, security, and data analytics capabilities positions ISVs as key players in delivering value-added solutions to customers across industries.

In conclusion, the IoT presents unparalleled opportunities for ISVs, enabling them to create smarter, more connected systems. While challenges such as security breaches and IP theft persist, the availability of comprehensive monetization platforms ensures that ISVs can overcome these hurdles and unlock the full potential of IoT technologies.