Software Licensing in 2024: What Lies Ahead?

As we close out another year full of industry challenges and successes, I am proud to reflect upon our achievements in 2023: Recipient of another prestigious industry award, the launch of a myriad of new product innovations and updates, and a number of successful collaborations with our customers and partners – all geared toward protecting IP with creative licensing strategies and code protection mechanisms. However, in this rapidly evolving world of connected devices, smart industries, AI, and other next generation technologies, no one can afford to rest as new unscrupulous modes of IP theft, critical data breaches, cybercrimes, and threats to human safety proliferate. As such, we continue to look ahead, identify the trends and events that will shape the industry in 2024 and beyond, and guide our licensing and protection technology and product strategies to stay at the forefront.

Here are some of the industry and technology trends we are following closely in the coming year:

• Subscription licensing: The advantages of subscription licensing are becoming more and more attractive for both end users and ISVs alike. Lower up-front costs and ongoing product updates for the end user and the benefit of recurring revenue streams are driving the burgeoning market for subscription models. ISVs and smart system manufacturers will require a flexible licensing system to leverage the benefits of subscription services.
• Cloud-based licensing: The cloud is shaping the world we live in. For software developers, license models tailored to cloud deployment are gaining traction as SaaS technology opens new avenues for revenue, such as pay-as-you-go, subscriptions, or usage-based pricing. The ability to securely store and manage licenses in the cloud will be critical for software publishers seeking to transition their applications to the cloud.
• Hybrid work environments: The combination of working at home vs. at the office is expected to continue, making licensing flexibility critical to accommodate remote and mobile teams and to facilitate license availability, security, and compliance. For an ISV, this new reality brings the nuances of software licensing into focus. It is now essential to have a flexible licensing system that enables a mobile workforce to access their software licenses wherever they are, at home or in the office, and whenever they need them, and do so securely.
• Customizable licensing: Some unique applications may need a particular type of software license specifically tailored to meet the exact specifications of a single customer’s environment that more than likely would be outside the norm of a standard off-the-shelf software license. This trend again emphasizes the flexibility requirements of a modern software licensing engine.
• AI and Machine Learning: With the emergence of AI/ML across a number of industries, there is a growing concern for data security and privacy as massive amounts of data are being generated and potentially exposed across a broadening attack surface. Security-by-design features, including advanced encryption and authentication protocols, will become prevalent.
• Industrial Digital Transformation: The industrial automation industry is undergoing a significant transformation driven by cloud-based advances in connected machines, robotics, and smart factories. Software is indispensable for controlling critical functions, collecting, and analyzing data. Software is also one of the most vulnerable vectors for malicious attacks, including reverse engineering, code cloning, code tampering, and counterfeiting (product piracy). The next generation of software must be developed with the underlying principles of security, resilience, and trustworthiness.
• Edge Device Security: Edge computing is used in a diverse range of applications. Because all systems involved are not necessarily kept online at all times, there needs to be a way to make sure that they can run without jeopardizing the license terms even if the system is disconnected from the Internet. Developers for applications running on edge devices need to consider mechanisms to protect their intellectual property and their license terms in actual practice.
• Additive Manufacturing Data Protection: Manufacturers are beginning to integrate various AI and machine learning-based algorithms into their 3D printing process in order to exploit the full potential of the technology. The trained printing model that grows from the machine learning process becomes the intellectual property of the manufacturer and must be protected from inadvertent modifications or even intentional attacks. There could be counterfeiters trying to build similar systems by illegally copying the property of the original maker or there might even be outright saboteurs who want to manipulate what the system can do in practice. Intellectual property needs to be protected against theft and piracy, but still be available for legitimate stakeholders to use, process, and reprocess.
• Licensing in Virtual Environments: Containerization is becoming a popular tool for running multiple applications in virtual environments. Both Docker and Podman are currently the most widely used platforms for creating, deploying, and managing applications via containers while open-source frameworks, like Kubernetes, for organizing container groups, are gaining popularity in the embedded field. But containerization is not without its challenges, particularly for software licensing. While virtualization makes it easier to handle different platforms in a unique way outside a connected network, it is often difficult to attach a secure hardware element like a CmDongle for licensing purposes. Clever licensing solutions, most likely based on the versatile CodeMeter license server, will be required to protect and monetize IP in such virtual, containerized environments.

These are just a few of the challenges that lie ahead in 2024 and beyond and you can be sure that Wibu-Systems will stay ahead of the curve to bring you the creative solutions necessary to protect your IP at all costs.

We wish you a very happy holiday season and great success in the new year.