Revenera Monetization Monitor

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 monetization models and strategies. Subsequent reports in the Revenera Monetization Monitor 2025 Outlook series will address Software Usage Analytics and Software Piracy & Compliance. All reports are based on the results of a global survey of 418 product leaders at global technology companies conducted by Revenera from May through July 2024.

Using a mix of monetization and deployment approaches continues to be common for software suppliers. Overall, subscription/term monetization is the most popular.

To manage entitlements/use rights, 55% of respondents use a commercial entitlement management solution as their main technology, 37% leverage other systems (such as a CRM or ERP), and 8% use a homegrown solution. Today 54% of respondents use the same software monetization (licensing, provisioning, and entitlement management) technology for all of their product lines. Many, though, use varied monetization technologies or disparate systems: 15% use different technologies across product lines and 31% use different technologies based on deployment models.

The transition to SaaS will continue. Research a year ago showed that 57% of respondents indicated that their use of SaaS in the coming 12–18 months would grow; that number goes up to 61% this year. Private cloud usage is also anticipated to grow at the same rate during this time.

Demonstrating the long tail of on-premises deployment, expected usage of it in the coming 12–18 months has gone up from 46% a year ago to 56% in the present research. At the same time, the number saying that use of it would decline has dropped from 15% to 10%.

As the move to SaaS grows, 85% of respondents say that their company has transitioned any of their software products from on-premises to SaaS deployments (which includes completed or in-process transitions). Among those using homegrown solutions to manage entitlements/use rights, this number drops to 31%.

Among those who are planning to increase their use of SaaS in the coming year and a half, 92% have already transitioned products from on-premises to SaaS.

More and more suppliers are transitioning multiple products from on-premises to SaaS. This year, 73% report having transitioned multiple products from on-premises to SaaS, up from 67% a year ago.

The most frequently reported time it took for transitions (whether yet complete or the anticipated completion time) was 1–3 years, as indicated by 43% of respondents. Nearly 1/5 (19%) reported the ability to do it in less than a year, up from only 7% a year ago, highlighting the acceleration of SaaS transitions. Respondents who take the longest time, more than 7 years, may be facing institutional challenges that contribute to the slow pace of transition.

How long the transition from on-premises to SaaS took

85% have transitioned any of their software products from on-premises to SaaS deployments. However, this number drops to 31% for those using homegrown solutions to manage entitlements/use rights.

Software suppliers must carefully consider the implications of barriers to ARR for their specific organizational goals. For example, those that rely heavily on subscription/term monetization will recognize that customer acquisition and retention are essential for securing ongoing revenue streams. Yet among the respondents who rely on subscription/term for more than 70% of their monetization models, the challenge of customer acquisition is significantly higher (61%) than for respondents overall (43%), indicating this as a prime area for attention and improvement.

Every dollar counts—perhaps these days more than ever. As cloud costs go up, protecting a company’s revenue recognition can be an effective approach to offset those rapidly growing expenses. Yet with a third of respondents citing customer churn as a barrier to growing ARR, there’s room for improvement.

Fortunately, software suppliers appear to be taking more active roles in addressing churn risk. Notably, the number of suppliers who monitor churn risk has increased from 90% to 97% over the past year. Additionally, they’re focusing on efficient measures. The number using automated notifications triggered by low customer engagement/activity went up from 31% a year ago to 48% presently.

Some best practices appear to be modeled by suppliers who use subscription/term monetization for more than 70% of their product lines; among this group, 59% (compared to 49% overall) analyze product usage data to identify decreasing engagement. Similarly, respondents who believe that the price of their product is “totally aligned” with the value delivered are more likely to take most churn identification measures, indicating that active engagement may correlate with appropriate pricing decisions that can help with retention.

Suppliers that want to improve their churn monitoring likely want automated alerts and other efficiencies that will prevent time-intensive processes, such as manually digging through results. They have an opportunity to pull data (including entitlement data, usage data, and engagement data) into a bigger data lake to help assess churn risk.

The introduction of new monetization models can be relatively rapid or can necessitate more than a year. Among respondents, the most frequently reported time was 3–6 months, as indicated by 34%.

Less than 1/10 (9%) report that it took them more than a year to implement a new monetization model. This number more than doubles, to 19%, among those who are using a homegrown system to manage entitlements and use rights, complicating the ability to get products to market quickly.

Better support of pricing and packaging changes remains the leading reason for changes to monetization strategies. Growing in relative importance over the past year is the need to add/improve automated enforcement, which can help improve annual recurring revenue and minimize revenue leakage.

The move to concurrent monetization models is gaining traction, with 30% citing it in last year’s research and 38% citing it in the present survey. Similarly, more respondents are moving to a device-based monetization model, with this change cited by 24% a year ago and 32% presently. The move toward usage-based models continues to grow, as well.

If your company plans to make changes to monetization strategies in the next 12-18 months, what changes will you be adopting?

The Revenera Monetization Monitor 2025 Outlook: Software Monetization Models and Strategies report is based on 418 complete responses to a survey conducted by Revenera from May through July 2024. 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%.