Gartner predicts more than 20bn connected devices by 2020. Any attention paid to the big tech events, such as the Consumer Electronics Show or Mobile World Congress, confirms that the take up and potential for IoT (Internet of Things) are both on steep upward trajectories.

This growth impacts a number of different areas. The Internet of Things is a convergence of hardware, software and services, often from different vendors or providers involved in a complicated chain of service delivery.

> See also: Gartner's top 10 Internet of Things technologies for 2017 and 2018

The service providers are enabling growth by connecting things, but any company is now a potential ‘IoT company’. Because connected devices need all three elements – hardware, software and connectivity – providers are starting to span multiple product categories and blurring the lines between themselves ever further.

IoT in practice

Supply chain visibility is one example of IoT from a business perspective. Connectivity of vehicles, warehouses, shops and even handheld devices specific to these organisations create an instant, up to date picture of what’s going on in the business.

Every device updates the SAP or Oracle database, for example, to keep the information fresh. Two-way exchange of information lets businesses become more agile.

In the consumer sphere, devices are being built into everyday tasks. Smart watches, for example, can accomplish many different functions. Bespoke health applications can track our activity, or we can see Outlook messages or iChats. This applies to devices on our wrists, but also to a range of quick-access interfaces.

The challenge is that companies are often so concerned with connecting gadgets that they don’t consider what adding them to the IoT actually involves.

Every time a warehouse connected device accesses a database, or every time a smartwatch links into a communications platform, these devices affect the license agreements with those vendors.

Right now, the vendors are in the early stages of properly monetising the IoT. Enterprise software publishers such as SAP, Oracle and IBM are starting to create and enforce pricing models to accommodate this explosion of devices accessing or benefiting from their software, but it’s the tip of a very large iceberg.

We can be certain someone will be made to pay for the extra licensing, the big question mark is over who that will be. Organisations throughout the supply chain of services are channelling data. Is the company who’s directly accessing the database the user? Or is it the company delivering data to the connected device? Or is it even the consumer? Who is responsible for paying for the database access?

Who counts as a user?

Anyone who indirectly consumes data from a database will increasingly be seen (by the software publishers) as a user. The big question will be exactly how do they sit within the existing license?

A more complicated issue relates to twice removed users – those who consume data via a service provider, who is drawing from an Oracle database, for instance. There are still some areas in which licensing agreements could change and companies need to be ready.

> See also: How the Internet of Things is changing business models

In reality, many, many organisations could already face unexpected results from an audit if they don’t pay attention to this expansion of data consumption. The only solution is to act now and get a clear view of who is using what. Which devices are active and consuming data? And are they necessary devices?

When you consider that 20 billion devices could be active within five years, keeping track of everything needs an automated, coordinated approach from the centre of the business out to its farthest reaches.

Manage the software licenses that you have and retain control of any new devices wanting to pull data. This will help to prepare for the inevitable onslaught of additional software licensing rules. Vendors are dreaming them up, right now.

Sourced from Simon Rust, head of product management, Snow Software