For a very long time, we use software by buying it once and then using it for a long time. However, it seems that software companies have realized that it brings them a good amount of revenue, they also need a longer term income from their software.
As a result, more than half of companies in the software industry plan to move to subscription models within the next year. In this regard, a survey was conducted by Revenera under the title “Software Monetization Models and Strategies 2021” and concluded what is the future of monetization in the software industry. The survey was conducted with 374 respondents.
Currently, the monetization models that dominate the industry are subscription and perpetual license. Subscription means that users, instead of purchasing software, pay a specific amount monthly for their software account to work, while perpetual license means that users will get a software license for a few months or a specific period after that. where they have to buy it again. . This way, software publishers generate better revenue with 36% of companies opting for subscription and 24% opting for license. This percentage will increase to 53% and 37% in the two categories respectively.
The main reason software publishers consider switching from a one-time purchase to monthly subscriptions or licenses is that it will allow them to earn better revenue in the longer term. With this, companies plan to enter a whole new vertical market and 72% of developers in the software industry agree with the idea. The best part about it is that the developers and software publishers give the users an attractive offer. Before subscribing to a monthly payment, users can evaluate or try the software before making the official decision to subscribe to it permanently.
However, there have been alignment issues between software pricing and values, where 30% of respondents believe that software value and pricing are fully aligned, while 63 believe that is not the case. .
Read next: Hybrid working could lead to increased employee burnout according to Microsoft study