INDUSTRY REPORT
Executive Summary
Nearly all software suppliers now collect product usage data or plan to do so, as reported by 97% of respondents to this year’s Revenera Monetization Monitor survey, up from 91% a year ago. Yet, as shown in this fifth year of research into trends in software monetization, many companies have steps to take in order to reliably harness and evaluate their customers’ usage behaviors in order to offer the consumption monetization models that are growing most rapidly.
Software usage analytics—the process of tracking and analyzing how users engage with software—provides the insights to help technology companies make well-informed choices about products and decide how to appropriately support the customer relationship to grow recurring revenue. More than half (56%) of respondents indicate that a top driver of planned changes is to offer usage-based monetization, yet many don’t have resources in place to execute this goal based on actual usage trends. Approaches to collecting customer intelligence can take varied quantitative and qualitative approaches, with the most effective being advanced product usage analytics, a quantitative method that 74% of respondents cite as either “effective” or “highly effective.”
In order to expand their hybrid monetization strategies, software suppliers must have effective usage data collection practices in place, though this remains a challenge for many. For example, nearly a quarter (24%) of respondents collect telemetry data, but don’t use it, letting it go to waste. At the same time, the number of respondents using a commercial usage analytics solution is on the rise (26%, compared to 16% in 2022), indicating recognition of a need to establish effective practices.
Visualizing, analyzing, and reporting on usage data requires effective underlying habits. This report evaluates best practices of those software suppliers who have the most practical approaches to software usage and analytics. It also illustrates how others can evolve their practices to optimize business goals.
Nearly all (97%, up from 91% in 2022) respondents either gather product usage data or plan to do so, but currently only 40% (up from 26% in 2022) indicate that their organization does this “very well.”
The number of respondents using a commercial usage analytics solution is now 26%, a jump of 10 percentage points from 16% in 2022.
Currently 24% collect telemetry data, but don’t use it, letting it go to waste.
The most effective method of collecting customer intelligence is advanced product usage analytics, a quantitative method: 74% of respondents rated advanced product usage analytics as either “effective” or “highly effective.”
More than half (56%) of respondents indicate that a top driver of planned changes to monetization strategies is to offer usage-based models to align with customer value, yet many don’t have resources in place to execute this goal.
Table of Contents
The Revenera Monetization Monitor:
Software Usage Analytics 2023 illuminates:
- Software Suppliers’ Increasing Reliance on Product Usage Data
- Improvement in Usage Data Collection Efforts
- Valuable Insights into Customers’ Use of Software
- Software Usage Data Collection and Analysis
- Collecting Customer Feedback
- Approaches: Qualitative/Quantitative
- Using Quantitative Results to Focus Qualitative Initiatives
- How Software Usage Analytics Helps Meet Customers’ Needs
- Usage Data’s Role in Optimizing the Customer Lifecycle
- Sharing Insights with Customers
- Software Usage Data Required for Usage-Based Monetization Models
The Revenera Monetization Monitor 2023 Series
This report is part of an annual series, first published in 2019, focusing on software monetization. This second report focuses on software usage analytics. The first report of the Revenera Monetization Monitor 2023 series focused on software monetization models and strategies; the third and final report will address software compliance and piracy. All reports are based on 454 responses to a survey conducted by Revenera from March through July 2023.
Software Suppliers’ Increasing Reliance on Product Usage Data
Improvement in Usage Data Collection Efforts
Cumulatively, a total of 97% of respondents either gather product usage data or plan to do so; this is a jump from 91% who reported the same in 2022. Among all respondents, 79% collect software product usage data, a jump from 62% reported in 2022. An additional 13% plan to collect software usage data by 2025, with 5% planning to do this but aren’t yet clear about customer acceptance or other inhibitors, like data privacy.
As noted in the first report in the Revenera Monetization Monitor 2023 series, the ability to gather product usage data continues to improve, with the number of respondents who can gather product usage data “very well” growing from 26% in 2022 to 40% in 2023. Another promising sign is that the number of respondents who don’t plan to capture this data has dropped from 9% to 3% over the same period.
For many, though, the need for manual processes or engineering work remains, as reported by 39% of respondents, up from 35% in 2022. With 13% planning to gather product usage data in the coming 12–24 months, the need is clear to find efficiencies, including the ability to visualize, analyze, and report on usage data in order to support business goals, such as optimizing annual recurring revenue (ARR).
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.
Ability to Gather Product Usage Data
Today, 40% of respondents report the ability to gather product usage data “very well.” An additional 39% can currently do some of this but it requires manual processes or engineering work.
