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Digital-rights management vendors have stumbled upon a potentially significant discovery: While they've focused on the most obvious market for their wares -- the entertainment industry -- a larger opportunity may await them in protecting and enabling business-information models.
The digitization of business data is forcing companies to expose intellectual assets in ways they'd never dreamed of a few years ago, and that can mean unprecedented vulnerability. Whether the goal is to prevent employees from accessing something they're not supposed to see, protect information from competitors, or just make sure customers get only what they've paid for, companies seek increasingly sophisticated methods of controlling data access.
Increasingly, digital-rights management software is the technology of choice. Not only does it give companies the granular access control they seek, but it's also transparent to users. Demand for this software in business-to-business settings will continue to grow as the volume of intellectual property mushrooms. In research published this month, Gartner characterizes business-to-business content protection as being more mature than its business-to-consumer entertainment counterpart. It recommends that in 2003 digital-rights management vendors concentrate on B-to-B deployments while keeping an eye out for breakthrough business models in the business-to-consumer arena.
Digital-rights management software is a licensing tool that sets and enforces rules governing the use of digital content, interacting with about every part of a company's information architecture. Some vendors, among them Microsoft and InterTrust Technologies Corp., sell a client-server setup in which a license server dishes out licenses that dictate access to content with the licenses stored on users' desktops to determine what they can see, change, and share.
Steam is building for a digital-rights management standard called XrML, a subset of XML that lets rights administrators use an editing tool to create plain-text licenses that are placed on a user's hard drive and dictate access and rights from there with no server needed. The champion of XrML is a company called ContentGuard Inc. Its founders invented XrML in the mid-1990s while at the Xerox Palo Alto Research Center.
Until recently, digital-rights management tools were designed primarily for Hollywood and the music industry. The focus was on letting content owners dictate how digital assets sold online are used, as well as divvying up proceeds of those sales by computing which rights holders are due what percentage of the royalties. In the past year, businesses have begun to demonstrate the value digital-rights management can bring to all types of digital assets.
Celera Genomics Group has been out front, using digital-rights management to power an online business model for selling access to sensitive intellectual property. Founded in 1998, the company, which specializes in therapeutic discovery, has assembled a catalog of information on genomes that make up human beings and mice.
Early on, Celera began to provide subscription-based access to its genomic information through its online Celera Discovery System. The majority of customers access a Web-based version, but Celera also offers proprietary application programming interfaces for an alternative access method. The Lightweight Directory Access Protocol directory that its homegrown application accessed to authenticate subscribers proved unreliable, blocking access to the information. So the company scrapped those tools a year ago, turning to eMeta Corp.'s eRights, an E-commerce application that employs a healthy dose of rights management to handle authentication and access. Celera wouldn't divulge what it paid for eRights, but a typical deployment costs between $150,000 and $200,000, and requires either developer and system-administrator training or professional services.
Here's how it works: A researcher studying cancer gene homologues at a California university wants to tap into the Celera database, which runs on a Compaq Tru64 system in Maryland, to get the latest data on related genes. As the researcher logs on to the Celera Discover System, eRights intercepts the request and assesses the researcher's relationship to the university, the school's license subscription, and what kind of access should be allowed. The digital-rights management program updates the university's records to log this use of the system, letting the researcher search, retrieve, and view raw data.
ERights has stabilized the service and also lets Celera offer more granular subscription options to its base of customers in the biotechnology, medical, biological research, and pharmaceutical industries, scientific applications specialist Todd Pihl says. The software manages subscriptions ranging from individuals to multi-institutional packages by categorizing users and determines access rights based on a variety of subscription-related attributes. "It provided us with a repository that we could use to put customers in a hierarchy," Web team leader Jim Jordan says. ERights also lets Celera make changes to access rights as genome databases are added to the service. The system uses business objects to represent groups and users, and when a database is added, an IT administrator needs only to point and click on groups or users to add access or send upgrade offers.
Most companies aren't ready to use digital-rights management in such a fashion; they lack the content strategy needed to extract value from the technology. "A large percentage of companies haven't really thought about this, or they've thought about it only in regard to Web-site content, which is only the tip of the iceberg," says Chan Preston, managing director of digital content management at BearingPoint, formerly KPMG Consulting. "They don't realize they have content that can be monetized."
Mitretek likes to be ahead of the market, Copeland says.
With such efforts to secure access to digital content in B-to-B settings becoming more commonplace, vendors can only blame themselves for how long it's taken digital-rights management demand to blossom outside the entertainment world, says InterTrust executive VP Talal Shamoon. They were so eager to go after the lowest-hanging fruit -- movies and music -- that they forgot there was much more widespread potential. "In some ways, we're the victims of our own marketing," Shamoon says.
In the coming years, Shamoon not only expects companies to increase their focus on protecting many forms of intellectual property, but he says the onslaught of Web services will fuel adoption of rights management by companies looking to protect software infrastructures that face potential exposure over the Web.
Software vendor LogicLibrary Inc. has figured this out. The 20-person company's core product, Logidex, is designed to help companies better manage their software-development assets. That can mean using Web services to expose those assets via online libraries or providing tools that help developers or external partners identify Web services available to them in the application-development process.
LogicLibrary has embedded eMeta's eRights into Logidex to give customers the ability to control access to software assets such as components, legacy applications, or best practices, as well as software-development projects. For instance, if an IT department wants to make software components available to developers via Web services, an IT manager can set up rules dictating which developers would have rights to access which tools, based on the development roles they play. "They're not so much trying to hide assets from their developers," says VP and co-founder Brent Carlson. Rather, they're trying to control and manage those assets.
Integrated Management Concepts also chose to bake digital-rights management directly into its application. Its software, designed to let companies share sensitive information such as labor rates or financial projections to make more-effective decisions on large-scale projects, has evolved from a product with no access control to one that had simple password protection to its latest incarnation as a digital-rights management-protected application. Managers often discouraged project team members by requiring that they remember passwords or contact another team member who controls a particular data set, chief technology officer Chris Taylor says. ContentGuard's technology provides customers with the transparent access control they've been asking for, and the result is that project data is getting into the right hands with more regularity.
Consider a company that's developing an aircraft. A manager who has oversight of wing design needs the right to allocate engineering staff or generate cost-analysis reports, but that manager doesn't need access to other parts of the aircraft design project. The overall project manager grants rights to all wing-related project work to that manager, who not only gets access to that specific data set but can also grant the same rights to his or her team members. No one gets bogged down with passwords or tracking down co-workers. "If you don't make that information distributable in the enterprise, there's no sense in collecting it in the first place," Taylor says. "Everyone needs the information that's important to them."
Business-to-business digital-rights management deployments aren't always about controlling access or enabling digital commerce. Sometimes, the decision to adopt digital-rights management is strictly a security move.
Tag Aviation USA prides itself on the level of service it provides managing and operating 120 corporate aircraft, and it has detailed its standard practices in a set of manuals that are distributed to flight and maintenance crews. The company is replacing hundreds of hard copies of the manuals with CD-ROM versions that can be updated regularly via the Internet.
The CD-ROM manuals also make it possible for Tag to protect the content using rights-management software from Digital World Services, a unit of German entertainment conglomerate Bertelsmann AG. The software prevents Tag employees from forwarding content from the manuals or accessing it without a password. The ability to prevent the CD-ROMs from falling into the wrong hands will provide Tag with confidence that its competitive edge isn't being compromised. "We don't want the competition to know what our policy is or what our standards or procedures are," says Larry Edeal, VP of flight operations and standards.
A company's goals -- access, commerce, or security -- matter little to digital-rights management vendors. Meg Fisher, senior director of business development at Digital World Services, which was founded to help Bertelsmann build a business model for online music distribution, says she expects Digital World to push harder on B-to-B digital-rights management deployments next year. While sales to entertainment and media companies constituted about 90% of Digital World's business just six months ago, Fisher anticipates a 50-50 split with B-to-B deployments in the near future.
A similar shift is seen for eMeta, says CTO and founder Jonathan Lewin. The goals of entertainment and B-to-B digital-rights management deployments aren't all that different anyway, he says. "They have a common aim to define digital content or services, define the user, and then define the terms of the access."
But the smart digital-rights management vendors make one key distinction: While the market they thought would be mature by now -- entertainment -- isn't as far along as anticipated, the segment they'd largely ignored -- B-to-B -- may soon be their bread and butter.
Claudia Newell/Three In A Box