Traditional hardware devices and software licensing are reaching an
interesting intersection point. Manufacturers of "large appliances" in
markets enabled by IP such as telecom, data security, and networking
are coming to several realizations
1. Hardware Costs
The hardware upon which their device is built is rapidly becoming
commoditized. Most all appliances consist of a standard processing core
(TI, ARM, Intel), with other, largely off-the-shelf components, a
standard embedded OS, and some packaging. Offering a complete appliance
that consists of software and hardware can be a convenience for the
customer, but in other cases, the cost of the hardware in the appliance
can be a barrier to sales.
2. Device Value
The value of the device is increasingly provided by the software
that is powering the device. I've had more than one company tell me
that the lion's share of their development cost is for the software
that is running on the device platform, and not the hardware itself.
3. Networks and Data Security
Networks and data security are becoming rapidly virtualized –
virtual storage and virtual storage networks, virtual network zones,
and virtual networks.
Is the iPhone Model the Answer?
As the device manufacturer struggles with ways to stay competitive,
yet generate profits, some of them turn to an iPhone model, where they
charge for different "applications" (configurations and capabilities)
on the device. The manufacturer can sell a lower cost starter version,
and subsequently enable more functions with embedded license
technology.
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Re: Software Licensing for the Virtual Appliance
