INDUSTRY REPORT
Software Piracy
Download nowExecutive Summary
Revenue leakage is likely caused when unlicensed software use occurs and undermines suppliers’ business goals. Piracy (when software has been configured or tampered with to remove or bypass license enforcement), overuse (the use of software exceeding the limits of the license), and/or misuse (the intentional configuration of the software to enable use beyond the limits of the license) are examples of usage that is not compliant with software licenses.
This report in the Revenera Monetization Monitor 2025 Outlook series highlights trends in the prevalence and scope of unlicensed software usage.
Piracy, overuse, and misuse are currently equally significant problems, with approximately ⅓ of respondents reporting that each is a “major problem” contributing to revenue leakage. This aligns them with more traditional business problems, such as customer churn, also cited by ⅓ of respondents as a “major problem.” Among the forms of unlicensed software usage, misuse is the driver of the greatest losses, with 13% reporting that misuse is responsible for losses of more than 30% of revenue.
Software monetization requires accurate data insights into where and how revenue loss is occurring. This report illustrates areas of opportunity for improved revenue recognition through usage analytics and/or compliance analytics.
Piracy, overuse, and misuse are now equally concerning issues, with approximately ⅓ of respondents citing each as a “major problem.”
Losses of more than 30% of revenue are on the rise for all forms of unlicensed software usage.
Inefficient monetization models are increasingly significant issues.
Awareness of how revenue loss takes place is improving.
Unlicensed software usage is a global issue.
Table of Contents
The Revenera Monetization Monitor:
Software Piracy and Compliance 2025 Outlook illuminates:
The Revenera Monetization Monitor 2025 Outlook Series
This report is part of an annual series focusing on software monetization first published in 2019. This report focuses on software piracy and compliance. The first report in the Revenera Monetization Monitor 2025 Outlook series addressed Software Monetization Models and Strategies; the final will address Software Usage Analytics. All reports are based on 418 complete responses to a survey conducted by Revenera from May through July 2024.
Challenges of Unlicensed Software Use
Sources of Revenue Leakage
Software suppliers may be exposed to revenue leakage for a variety of reasons. While a year ago, piracy stood out as the most commonly cited “major problem,” this year’s research shows that piracy, overuse, and misuse are all cited nearly equally, with approximately ⅓ citing each as a “major problem.” This even distribution of unlicensed usage reflects a relative rise in overuse and misuse, perhaps an indication of users’ aims to squeeze every bit of value out of their software. The growth of responses that overuse is a major problem may suggest that respondents now have an increased focus on license enforcement to avoid revenue leakage, ensuring that customers only use what they’re entitled to use. Overall, software suppliers must now pay equal attention to each of these areas that can negatively impact revenue recognition.
Customer churn, a longstanding and somewhat traditional problem, appears to be an issue that software suppliers are addressing. This year’s survey shows a slight dip in the number of respondents citing customer churn as a major problem; this may suggest that software suppliers are addressing churn risk sooner. Yet ⅓ of respondents still cite churn risk as a major problem, putting it on a par with the three forms of unlicensed software usage: piracy, overuse, and misuse. Software suppliers should be giving equal focus on each of these areas in order to comprehensively address revenue leakage.
Reports of inefficient monetization models being a major problem have gone up significantly, more than doubling over the past two years. This might suggest a connection to the overall impact of cloud and other costs that impact profitability, highlighting the need for suppliers to test and use other monetization models. Ultimately, software suppliers must sell software the way users want to buy it.
Definitions
Unlicensed Use
- Piracy: the use of software that has been configured or tampered with to remove or bypass license enforcement.
- Overuse: the use of software exceeding the limits of the license.
- Misuse: the intentional configuration of the software to enable use beyond the limits of the license (e.g., cloning).
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.
Issues Reported to Cause Revenue Leakage
Piracy, overuse, and misuse are now essentially equally problematic, with approximately ⅓ of respondents citing each as a “major problem.”
These issues are now on par with more traditional problems like customer churn. Software suppliers must pay equal attention to each of these areas that can negatively impact revenue recognition.
