By Jeff Kaplan, managing director, THINKstrategies

The hottest topic in the tech industry is the ‘Internet of Things’ (IoT) – the idea that nearly every object and device will be connected via high speed networks in the not too distant future. These connected things will produce valuable information which will enable companies to better understand how their products and services are being used so they can better serve their customers, and be in a better position to gain a competitive advantage.

The rapid rollout of high speed networks and low cost sensors are making the IoT idea increasingly viable. But, it is the ability to embed increasingly powerful software into the sensors, networks and systems that collect, collate, analyze and share the data being generated that is key to the success of IoT deployments. In short, IoT is an unprecedented new, software-driven market opportunity.

If software is at the heart of making the promise of IoT a reality, then a new set of rules for software licensing, entitlement management and IP protection is essential. The IoT exponentially increases the number of endpoints for software distribution. It also dramatically accelerates the rate of deployment.

Compounding these software licensing challenges is the new API economy of today’s IoT and Cloud environment in which multiple devices, objects and apps are expected to interoperate so that they can create a meaningful supply-chain that supports the enterprise’s business processes and corporate objectives.

These new market dynamics are demanding new ways to approach software licensing, entitlement management and IP protection. Companies that fail to recognize these fundamental changes to their business models are at risk of being disrupted by a new generation of players that are not wedded to the previous doctrines of the marketplace.

Just look at how Apple disrupted the music and entertainment industries; Amazon changed retailing; and how Netflix displaced Blockbuster. Each of them leveraged new software to create new business models and service delivery capabilities. Creating new approaches to software licensing, entitlement management and IP protection was essential to their success.

The quickly evolving IoT marketplace is challenging us to rethink software licensing, entitlement management and IP protection again.

Kaplan is the Managing Director of THINKstrategies (www.thinkstrategies.com), founder of the Cloud Computing Showplace (www.cloudshowplace.com) and host of the Connected Cloud Summit focused on the IoT market on September 18 in Boston, MA, http://cloudsummits.com/event/connected-cloud/. He can be reached at jkaplan@thinkstrategies.com.