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Software companies plan on switching to subscription models in the next 18 months in hopes for a better revenue

For the longest times the way we use software’s is by buying them once and then using them for a long time. However, looks like software companies realized that this though was getting them a fair amount of revenue, they needed a longer term earning from their software’s as well.

Hence more than half of the companies in the software industry are planning on moving to subscription models in the next year or so. On this, 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 between 374 respondents.

In the current times, the monetization models that have been leading the industry are subscription and perpetual licensing. Subscription means that users instead of buying a software pay a specific amount monthly to keep their software account working while the perpetual licensing will mean that users will get a software license for a few months or a specific time after that which they have to buy it again. This way software companies are generating a better revenue with 36 percent of the companies opt for subscription and 24 percent opting for licensing. This percentage ratio will increase to 53 percent and 37 percent in both categories respectively.

The main reason software companies are planning on switching from one time buy to monthly subscriptions or licensing is because this will provide the companies to earn better revenue for a longer term in time. The companies through this are planning to enter a whole new vertical market and 72 percent of the developers in the software industry are on board with the idea. The best part about this is that developers and software companies are giving users a great offer. Before subscribing to a monthly payment, users can evaluate or try the software before they make the official decision to permanently subscribe to it.

However, there have been issues with alignment between prices and values of software, where 30 percent of the respondents believe that the software value and pricing are totally aligned while 63 believe that is not the case.
Read next: Hybrid Work Could Result in Increased Employee Burnout According to Microsoft Study

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