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Software usage data allows product managers and teams to improve software, deliver enhanced value to customers, and to stay-on trend with usage patterns and to implement consumption-based models. Usage data is critically important, whether the software is cloud-based, on-prem, or embedded on devices.

This article is the second in a six-part series about monetizing IoT by Flexera's Cris Wendt. In this article, Wendt defines the IoT stack and discusses how best to monenetize it.

Suppliers who don’t develop usage data collection capabilities run the risk of falling behind their competitors. With the software monetization solutions available today there’s no reason for suppliers to operate in the dark.

Flexera's Monetization Monitor: Usage Management & Insights report offers an industry benchmark for how companies are using usage data. BetaNews reports that "Software developers need to know not just whether an app is being used but also which features are most used and whether that use is increasing or declining."

As a software company implements a framework for moving to subscription, thoughtful consideration of needs (the supplier’s and its customers’) are important parts of the plan. This article by Flexera’s Cris Wendt highlights the keys to an effective implementation.

Subscription is a highly flexible software monetization model. This article by Flexera's Scott Niemann outlines its benefits and consider best practices for implementation in order to maximize the long-term revenue growth opportunities of this rapidly growing model.

Flexera Chief Growth Officer Eric Free offers 5 steps for successful IoT business models and how to leverage data-driven insights to make business decisions quickly.

This article is the first in a six-part series about monetizing IoT by Flexera's Cris Wendt. In this first article, Wendt looks at monetization goals to help businesses produce healthy, growing revenue streams that set the foundation for monetization.

Sean Sullivan, a product strategy consultant for Product Stride, notes that the recent Flexera Monetization Monitor found that 63% of software organizations continue to have moderate to extensive on-premises deployments. Sullivan concludes "if you do a review of current product management blogs, books, podcasts, and tweets you will find a number of modern product development best practices that simply do not work with on-premises software. Some can with extra work, but most do not. This is a problem."

Monetization, pricing, and licensing are critical strategic topics that define the success or failure of a product line. In order to deliver a short time to value for customers and to build reliable recurring revenue streams, product managers must have appropriate processes and systems in place to manage and monetize their products effectively.

To meet customer demands, one-third of companies using SaaS as their primary deployment model must still offer and manage perpetual use licenses alongside regular subscription-based offerings.

When software producers are asked how they will change their monetization models over the next 18 months, responses show that both usage and subscription models will see the strongest increases: 48 of respondents see subscription/term-based monetization growing, compared to 43 percent who expect to see growth in usage-based models, 32 percent who predict growth for outcome/value-based models, and 29 percent who see growth for perpetual license models.

Enterprise software vendors are subscription happy, but they're delving into usage plans for customers too. Toss in some perpetual licenses and things get complex quickly.

Subscription is already the most widely-used monetization model amongst software producers, but perpetual licenses are still very common.

The world is getting more complex for companies selling technology. Software and IoT companies must navigate a matrix of monetization and deployment models to deliver the services customers want, in the way they want it.

Once upon a time you bought a license for a piece of software and you could, essentially, run it forever. While much of the market has now shifted to subscription models, 65 percent of producers are still offering perpetual licenses, while 74 percent utilize subscription models for some or all of their products.

While perpetual licenses are still out there, subscription pricing models, and utility pay-per-use models have become increasingly common, especially for SaaS applications.

The growing complexity around licensing models don’t just impact software vendors, it also impacts MSPs.

80% of all software vendors are estimated to be offering subscriptions by 2020. While companies scramble to make this transition, those that establish and follow a comprehensive plan are the ones most likely succeed on the journey.

As the Internet of Things matures, providers of IoT devices and systems have had time to study how businesses utilize their solutions, and are leveraging those observations to inform new features, services, and monetization models.