53% of software companies will move to subscription models by 2023

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More than half of companies plan to move to subscription models in the next 18 months, according to a report from ReveneraBut at the same time, a single approach to monetization or implementation strategy is not enough to keep up with diverse customer needs.

Software buyers should be aware that there is a high demand for hybrid monetization and deployment models. The dominant monetization models today (used for over 51% of your business) are subscription (36%) and perpetual (24%) licenses. In the next 12 to 18 months, subscription and usage-based models will be the two fastest growing categories for monetization models, with anticipated usage increases by 53% and 37% of respondents, respectively.

What is driving the change?

For the past two years, the main reason for changing software monetization models was to implement a recurring revenue model (reported by 62%). Organizations that plan to change monetization models are doing so primarily to enter a new market or verticals (reported by 62%); Product managers are more active in their search for new vertical markets, and 72% are looking to make this move. The main motivators for changing licensing policies are to provide a temporary evaluation / try before you buy (reported by 41%); add / improve automated application (39%) and add new price meters (34%).

Still, software vendors must pursue the goal of aligning price and value.

Only 30% of respondents say that price and value are “fully aligned.” Confidence in the alignment between price and value increases significantly for monetization models that are more precisely linked to the measurements of use and participation. Of the companies that can collect usage data “very well”, 61% feel that prices are in line with value.

The Revenera Monetization Monitor: Software Monetization Models and Strategies 2021 report was designed to discover how tech companies are monetizing and planning to monetize their software. Revenera carried it out from mid-April to mid-June 2021. The 374 respondents were directors and superiors (33%), manager / team leader (33%), and individual collaborators / consultants (34%).

Read the full report by Revenera.

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