INDUSTRY REPORT
Executive Summary
Software usage analytics—the process of tracking and analyzing how users engage with software—provides actionable insights that help software suppliers make informed decisions about their products. Clarity into how customers use products can help software producers build robust solutions that lead to user engagement and ongoing customer relationships.
This report evaluates the trends in how software producers collect and analyze software usage data. It also identifies areas of potential improvement, including the importance of initiating usage data collection and automating collection efforts through purpose-built commercial entitlement management solutions. It builds on findings presented in the Revenera Monetization Monitor: Software Monetization Models and Strategies 2022, which focused on software monetization and deployment models.
As suppliers offer hybrid monetization approaches, relying on software usage analytics is particularly important. It helps drive informed pricing decisions for usage-based monetization models, such as consumption and metered.
By 2024, 80% of software suppliers will collect software usage data.
In a trend away from time-consuming processes, reliance on manual interventions dropped by nearly 10 percentage points, from 44% in 2021 to 35% in 2022.
Only about ¼ (26%) of respondents indicate that their organization can currently gather product usage data “very well,” indicating room for improvement for the majority of software suppliers.
Suppliers that collect usage data have greater visibility into how customers use their products. For the essential metric of whether suppliers can see if customers are using their product at all, 52% of those who collect usage data have this visibility, while the number drops to 25% among those that don’t collect usage data.
Table of Contents
The Revenera Monetization Monitor 2022 Series
This report is part of an annual series, first published in 2019, focusing on software usage analytics. The first report in the Revenera Monetization Monitor 2022 series addressed software monetization models and strategies; the next will address software compliance & piracy. All reports are based on 261 responses to a global survey conducted by Revenera from mid-April through mid-July 2022.
Software Suppliers’ Interest in Product Usage Data
Software Usage Data Collection Trends
More important than just collecting usage data is the capability to visualize, analyze, and report on it efficiently, without requiring manual processes or engineering work. Only about ¼ (26%) can currently collect usage data very well, while 9% have no plans to capture this data, indicating room for improvement.
Please rate your organization's ability to gather product usage data
18%
of respondents plan to gather software product usage data in the next 12–24 months—
double the rate (9%) that planned to do so in 2021, indicating growing interest in the practice.
SOFTWARE USAGE ANALYTICS
Software usage analytics is the process of tracking and analyzing how users engage with software. It provides:
- Tracking, which usually happens via a call-home system that collects raw data about user actions and computing environments,
- Analysis, through visualization dashboards that show data, identify trends, user behavior, differentiators across user segments, etc., and
- Actionable insights, facilitating context-relevant engagement with the software.
USAGE DATA
Usage data is valuable for all monetization models. It helps product management, marketing, software engineering, sales, customer success, compliance, and senior management teams. Uses include feature prioritization or roadmap development, UI/UX design, beta testing, deprecating features, pricing decisions, software version decisions, and piracy tracking.
Confidence in Ability to Collect Product Usage Data
Software usage data collection trends are maturing. Over the past year, reliance on manual interventions dropped by nearly 10 percentage points (44% in 2021 to 35% in 2022), indicating progress away from time-consuming processes.
Reliance on Manual Interventions
80%
By 2024, 80% of software suppliers will collect software usage data.
Suppliers Collecting Software Usage Data
Approaches: Qualitative/Quantitative
Half (50%) of all respondents use quantitative data to segment users to get more qualified customer feedback. Among respondents who find telemetry or product usage analytics effective or highly effective, 77% use quantitative data to segment users.
Quantitative collection methods, such as basic telemetry from the product and advanced product usage analytics, can help provide robust insights into customers’ preferences, when combined with qualitative methods (e.g., support calls, customer interviews, sales feedback, and email surveys).
Approaches to Collecting Software Usage Data
Approaches to Collecting Customer Feedback
While customer interviews are the most popular approach, they are part of a manual qualitative strategy, requiring a significant time commitment. Advanced product usage analytics is an automated quantitative approach, requiring far less time than manual methods.
Approaches for Collecting Customer Feedback Rated “Highly Effective”
Usage-based Monetization Models Growing
Efficient Usage Data Collection Improves Monetization
Clear insights are essential for moving to or offering consumption and usage- based models. They are a best practice for all other monetization models, as they help strengthen the overall customer relationship.
Expected Growth or Decline of Usage-Based Monetization Models Over the Next 12–18 Months
Extensive Use (>51%) of Usage-based Monetization*
Capabilities to Manage the Customer Lifecycle
Data provided at multiple points in the customer lifecycle helps provide insight that is useful to the supplier and that offers clarity to the customer about their usage.
The most commonly used measure of the customer lifecycle is the renewal date, but even that is in place for only 49% of respondents, indicating room for improvement across capabilities to manage the customer lifecycle.
The ability to track all customers and their entitlements/use rights jumps from 46% overall to 64% among respondents using a purpose-built commercial entitlement management solution.
Software suppliers not only analyze usage for their own use, they also share usage data with their customers. Among those suppliers that rely on a purpose-built commercial entitlement management solution, a greater number of their customers ask for usage/utilization data. This may reflect customers’ higher expectations from suppliers who are able to provide this data more easily.
Software entitlement management enables suppliers to reconcile what is being used versus what has been purchased and enables them to:
- Identify milestones in the customer lifecycle, and
- Have clear measurements of how their software is being used or where drop-off occurs
Sharing this information with customers helps illustrate the value they are receiving, including:
- Whether they are using the software at all,
- What their entitlements/use rights are,
- Which version each customer is using, and
- Which features each user has adopted.
Having capabilities in place to auto-upgrade customers who are eligible for software renewals, auto-updating devices that are only intermittently connected to the internet, or auto-provisioning features to devices or users can also help streamline interactions with customers.
Importance of Improving Software Usage Analytics
Better Visibility Required
As software suppliers aim to understand how customers use their products, greater visibility into software usage data is required. Common metrics, shown on a dashboard, reveal if and how customers engage with the software.
Comparing What Suppliers Can See (Collecting Usage Data vs Not Collecting Usage Data)
24%
Nearly ¼ (24%) of suppliers that do not collect usage data can’t see any common metrics of how customers use their product.
Insufficient Insights Complicate Pricing
The biggest hurdle to aligning price and value is the lack of insights to monetize the most valuable features, as reported by 44%. Software usage data is crucial in order to price the product in alignment with customers’ perception of the value. Learn more about why software suppliers are changing monetization models in our first report, Revenera Monetization Monitor, Software Monetization Models and Strategies 2022.
Usage data is also essential for successfully making planned changes to monetization models. Implementing a recurring revenue model, a driver of change for 48% of respondents, isn’t viable without accurate insights.
Top Drivers of Planned Change
Survey Background
The Revenera Monetization Monitor: Software Usage Analytics 2022 report is based on 261 responses to a survey conducted by Revenera from mid-April through mid-July 2022. This research project looks at software producers’ software business models, pricing, usage and transparency. Due to rounding, percentages may not always appear to add up to 100%.
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What technologies are you using to manage entitlements?
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Reuse
Revenera encourages the reuse of data, charts and text published in this report under the terms of this Creative Commons Attribution 4.0 International License. You are free to share and make commercial use of this work as long as you attribute the Revenera Monetization Monitor: Software Usage Analytics 2022.
The Bottom Line
Clarity into how customers use software is essential, yet relatively few software producers do it well. Today’s software suppliers must have accurate and actionable insights. Implementing a software usage analytics solution that can automate the collection process and identify how customers use your data can address important considerations, including how to refine products, how to drive improved product engagement, and how to make informed decisions that improve customer retention.
Next steps
Learn how Revenera can help you protect your applications, manage compliance, understand customer needs and drive recurring revenue.
Learn more in the first report of this year’s series, Revenera Monetization Monitor: Software Monetization Models and Strategies 2022.
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.
