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More than half of companies plan to switch to subscription models in the next 18 months, according to a report by Will come back, but at the same time, a single approach to monetization or deployment strategy is not enough to keep pace with varying customer needs.
Software buyers should consider the high demand for hybrid monetization and deployment models. The dominant monetization models today (used for over 51% of their business) are subscription (36%) and perpetual licenses (24%). Over the next 12-18 months, subscription-based and usage-based models will be the two biggest growth categories for monetization models, with increased usage predicted by 53% and 37% of respondents, respectively. .
What is driving the change?
Over the past two years, the main reason for the change in software monetization models was the implementation of a recurring revenue model (reported by 62%). Organizations that plan to change their monetization models are doing so primarily to enter one or more new verticals (reported by 62%); Product managers are more active in their quest for new verticals, with 72% of them looking to make this move. The main motivations for changing licensing policies are to provide a temporary review / try before you buy (reported by 41%); add / improve the automated application (39%) and add new pricing meters (34%).
Yet software vendors must pursue the goal of aligning price and value.
Only 30% of respondents say price and value are “fully aligned”. Confidence in the alignment between price and value increases dramatically for monetization models that are more specifically related to usage and engagement metrics. Of companies that can âcollect usage data very well,â 61% believe pricing is aligned with value.
The Revenera Monetization Monitor: Software Monetization Models and Strategies 2021 report was designed to find out how technology companies monetize and plan to monetize their software. It was conducted by Revenera from mid-April to mid-June 2021. The 374 survey respondents were directors and over (33%), managers / team leaders (33%) and individual contributors / consultants (34%).
Read it full report by Revenera.
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