Press-Releases

Revenera Report Reveals Growing Reliance on Hybrid Software


ITASCA, Ill., Sept. 21, 2023 (GLOBE NEWSWIRE) — Revenera, producer of leading solutions that help technology companies build better products, accelerate time to value and monetize what matters, today released the Revenera Monetization Monitor: Software Monetization Models and Strategies 2023 report. This report is part of an annual series in its fifth year. It provides product executives at software, intelligent device, and IoT companies with benchmarks about digital business models and trends related to hybrid approaches to monetization and deployment models.

“Software suppliers aim to grow recurring revenue and streamline operations. To achieve this, they’re relying on software-as-a-service (SaaS), the most widely used deployment model today, and subscription/term and consumption monetization models,” said Nicole Segerer, SVP and General Manager at Revenera. “Software companies are looking to apply pricing and packaging changes faster, but we also see that time to market for their products often falls behind timing expectations. This is a consequence of the complexity software companies have to manage when they go to market with a diverse and hybrid offering structure. Centralizing software monetization initiatives and gaining greater visibility into product usage are increasingly essential to addressing this challenge.”

Highlights from the Revenera Monetization Monitor: Software Monetization Models and Strategies 2023 report include:

  • Monetization models are evolving, and respondents expect more consumption and subscription in the future.
    • Subscription models are growing fastest: Subscription/term monetization continues to grow in popularity. It’s the leading monetization model among companies that use one model extensively (≥51 percent of their business); 31 percent use it extensively, and 51 percent use it moderately (for 11–50 percent of their business).
    • This is a breakout time for consumption/metered models: The past year has seen a jump from 31 percent to 46 percent reporting moderate usage of consumption models, and a jump from 14 percent to 26 percent using consumption models extensively. For metered models, moderate usage rose from 25 percent to 44 percent; extensive use of metered models rose from 12 percent to 23 percent.
    • Subscription/term is the most widely used monetization model: A combined 82 percent use subscription/term licenses at least moderately, making it the monetization model with the most widespread usage. Perpetual models also continue to be relevant and widely used, with 78 percent using it at least moderately. Together, these illustrate the varied configurations of hybrid offerings within monetization models.
    • Looking into the future, subscription and consumption models are tied: Subscription/term and consumption are tied for the monetization models, showing the most anticipated growth in the coming 12–18 months, each reported by 59 percent of respondents.
    • Competitive dynamics is driving changes: The need to respond to competitive dynamics, reported by 76 percent, was the top driver of completed changes to monetization models. The top driver for planned change is to enter new markets (geographies, verticals, etc.), reported by 52 percent.
      • More than half (54 percent) of respondents plan to change licensing strategies to better support their pricing and packaging change goals.
      • Nearly a quarter (23 percent) are preparing for usage-based licensing.
  • Deployment models are also mixed. SaaS is growing the fastest, but on-premises isn’t going anywhere for many.
    • SaaS is the most widely used deployment model today. Eighty percent of respondents use SaaS at least moderately, including 28 percent that use it extensively (for more than 51 percent of their product lines).
    • Most companies have or are transitioning some software to SaaS: Software suppliers are transitioning software products from on-premises to SaaS deployments, with 82 percent of respondents indicating they’ve completed or are in the transition process for at least one of their products.
      • Among those who have made this transition, 16 percent have done so for one product, 67 percent have moved multiple products, and 18 percent have transitioned all products.
      • The most common timeframe required for transition, as reported by 46 percent of respondents, is 1–3 years.
      • The transition to SaaS will continue, with 57 percent of respondents indicating that reliance on it will increase in the next 12–18 months.
    • Companies using commercial monetization solutions appear to be further along in their transitions to SaaS. 93 percent of those using purpose-built commercial entitlement management solutions have transitioned at least some of their software products from on-premises to SaaS deployment, compared to 55 percent of those using homegrown solutions.
    • On-premises remains common. Nearly one-third of respondents still use on-premises deployments extensively. Even as cloud and SaaS usage has grown in past years, 29 percent of respondents report using on-premises software extensively, indicating the staying power of this deployment model—and the need to support it.
  • Software providers are leveraging usage data to improve how they align price and value.
    • Nearly all respondents are gathering preliminary product usage data: A record 97 percent report collecting product usage data or planning to do so.
    • The number of respondents now using the same software monetization technology across all product lines is 47 percent. This is up from 32 percent a year ago, illustrating a desire to gain greater visibility into licensing and entitlement/subscription management via a single pane of glass.
    • Users of purpose-built systems report greater alignment of price and value. Nearly ⅔ (65 percent) of this group believe price and value are “totally aligned,” compared to only 32 percent overall; nearly ⅔ (66 percent) report the ability to collect product usage data “very well,” compared to 40 percent overall.
    • Significant expectations exist for improving product usage data: The ability to gather “very well” data is growing, reported by 40 percent, up from 26 percent in 2022.
    • Plenty of room to grow around aligning pricing with value: Only 32 percent of respondents feel that pricing is “totally aligned” with the value provided to customers. This number has remained consistent year over year, indicating that there’s always room for continuous improvement among software suppliers that seek to align price and value, which is essential for successfully implementing new monetization models.
    • Delayed innovation mutes recurring revenue growth: The top barrier to growing annual recurring revenue (ARR) is “delayed time-to-market for new features/enhancements,” 54 percent of respondents reported.
    • Churn risk helped through better insights: The top method of identifying customer churn risk is periodically collecting user feedback through surveys, as reported by 54 percent. Overall, 10 percent of respondents do not monitor churn risk.

Methodology
Revenera conducted the 2023 Revenera Monetization Monitor Software Industry Survey from March through July 2023. Job levels of the 454 survey respondents were C-level/executive (16 percent), SVP/VP (13 percent), director (34 percent), manager/team leader (27 percent), and individual contributors/consultants (10 percent). This report focuses on software monetization models and strategies; subsequent Revenera Monetization Monitor 2023 series reports will address software usage analytics and software compliance & piracy.

Follow Revenera

About Revenera
Revenera helps product executives build better products, accelerate time to value, and monetize what matters. Revenera’s leading solutions help software and technology companies drive top-line revenue with modern software monetization, understand usage and compliance with software usage analytics, empower the use of open source with software composition analysis, and deliver an excellent user experience—for embedded, on-premises, cloud, and SaaS products. To learn more, visit www.revenera.com.

Revenera



Source link

The content is by Globe Newswire. Headlines of Today Media is not responsible for the content provided or any links related to this content. Headlines of Today Media is not responsible for the correctness, topicality or the quality of the content.

Back to top button