Software Compliance and Piracy Trends

In an increasingly challenging economy, software companies need clear visibility over license compliance, unlicensed usage, and where revenue leakage occurs. Software usage data and compliance intelligence can provide essential insights that identify losses and help businesses convert piracy into profit.

The final report in the Revenera Monetization Monitor 2022 series examines software piracy, misuse, and overuse. This report outlines how data-driven and usage-based monetization strategies can help prevent revenue leakage, and the headline results are significant: 

• Misuse is responsible for more than 30% of revenue leakage
• 36% of respondents cannot state how much revenue they lose to piracy, with this area lacking visibility
• Software suppliers often trace revenue leakage back to license compliance issues. 58% of respondents report leakage due to overuse, 51% to misuse, and 47% to piracy.

These findings demonstrate the lack of visibility that many software suppliers currently experience, highlighting the need for tracking, analysis, and actionable insights across user engagement to reduce revenue losses.

Let’s dive further into the report.

The Landscape of Revenue Leakage

The leading causes of revenue leakage are monetization strategies and unlicensed usage issues. Both ineffective licensing and software subscription overuse are the most common issues, reported equally by 58% of respondents.

The first step toward recovering revenue leakage is to clearly understand how it occurs. Yet, for many companies, visibility is an area they continually struggle with. Especially when it comes to unlicensed use; over one in three suppliers don’t know how much revenue they lose to overuse and piracy.

A lack of visibility leads to companies losing sight of their clients, allowing unlicensed use to occur and revenue to leak. Misuse is especially prevalent here, accounting for more than 30% of all revenue lost.

Companies that use metered or consumption software billing models have access to continual usage insights. Usage tracking allows them to pinpoint leakage, develop recovery strategies, and refine their programs before significant losses occur.

Webinar: How to Build a Compliance Program to Generate Revenue

Methods of Tracking Software Piracy, Overuse, or Misuse

There are several leading strategies to identify revenue loss from unlicensed usage. For example, anecdotal reports from Sales, telemetry, and regular audits are used by 41%, 36%, and 31% of respondents, respectively. Yet, almost a third of surveyed businesses have no insight into piracy, overuse, or misuse.

This lack of visualization is a driving factor for many software companies that are seeking to alter their monetization strategy. 63% cite eliminating revenue leakage as the primary cause for their change. As usage-based monetization models have better visualization, they are crucial for identifying and neutralizing software piracy, overuse, and misuse.

It is not uncommon for customers to request usage insights, with 24% of respondents citing this as a common practice and 36% stating that clients will ask for at least some user data. Delivering a customer report on their own usage analytics helps to fortify a connection between price and product offering. By demonstrating the value of the service to a client, software companies can strengthen their customer relationship. 

Especially in times of economic uncertainty, demonstrating the value of software to the customer helps to improve relationships, minimize losses, and reduce revenue leakage. By turning to usage-based monetization and the insights it produces, software companies can pinpoint the reason for revenue leakage and formulate strategies to remedy this problem.

The more usage data your software can gather and the greater degree of visualization it can offer, the more prepared you will be to identify piracy and compliance issues and resolve them.

To learn more about the latest industry trends in software compliance and piracy, please download the full Monetization Monitor report.