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The Perils of Homegrown Licensing Solutions with IoT

By Mae Kowalke, TMCnet Contributor

The Internet of Things (IoT) means a lot more devices will be carrying around software that needs licensing management. Many firms will be tempted to use homegrown solutions, as on the surface it seems relatively easy to tie licensing to ERP and CRM systems in the cloud era.

This probably is a mistake, however.

A recent blog post by Flexera Software highlights a new Gartner (News - Alert) study that talks about the pitfalls of using homegrown licensing systems for IoT. There are at least seven pitfalls that companies face if they go the homegrown route.

First, firms with homegrown licensing solutions could have downtime caused by not being able to respond quickly enough to a hardware crash that requires the company to rehost its licensing management system.

Second, homegrown solutions are unable to introduce new business models easily because custom licensing system usually require substantial engineering resources to make big changes.

Third, there’s the issue of future-proofing. Just as homegrown solutions suffer from inflexibility with regard to new licensing schemes, they also suffer from an inability to easily grow and take advantage of new technologies. They aren’t future-proof like third-party licensing systems, basically.

Fourth, pushing software updates to IoT devices needs to be quick and efficient. It is hard to achieve this with homegrown solutions, as they don’t typically scale as well as third-party licensing solutions.

Fifth, adding all the features needed for modern software licensing is no small feat. From license generation and email notifications to self-service user interfaces and web services for in-product activations, setting up a robust, homegrown licensing system is not as easy as it sounds on the face of it.

Sixth, maintenance is a lot harder with homegrown licensing systems, and that can get sticky with the pace of innovation in IoT.

Finally, there’s the question of how well a homegrown licensing solution can store all the data that is necessary to support modern licensing schemes.

“If you are using your ERP/CRM system to manage the licensing lifecycle, where do you store the all the data?” asks the Flexera blog. “Using your ERP/CRM becomes a struggle with the new, complex data you'll have to track and manage. This includes linking assets and entitlements, tracking devices, storing activations, tracking all license and entitlement lifecycle events and dealing with the huge amounts of usage data captured for usage-based licensing.”

So while it is possible to build out a custom, homegrown licensing solution for IoT software, it probably isn’t advisable in most cases.