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Solutions for Industrial Computing

The Solutions for Industrial Computing Blog is the place for conversation and discussion about industrial computers, systems and controllers; communications and connectivity; software and control; and power strategies. Here, you'll find everything from application ideas, to news and industry trends, to hot topics and cutting edge innovations.

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Software Licensing for the Virtual Appliance

Posted April 29, 2010 12:01 AM by FlexeraSoftware

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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