4 Paths to Monetizing Software: Advice from Top SaaS Entrepreneurs

Another less common type of licensing is consumption-based applied for cloud software. The amount of money depends on the actual software consumption by customers and doesn’t impose any term-based commitment. The exact origin of the term ’software monetization‘ is unknown, however, it has been in use in the information security industry since 2010. It was first used to articulate the value of licensing for cloud-hosted applications, but later came to encompass applications embedded in hardware and installed on premises. Today, software monetization broadly applies to software licensing, protection, and entitlement management solutions. In the digital advertising space, the term refers to solutions that increase revenue through installs, traffic, display ads, and search.

monetization methods for software

You must consider a feature set that is appealing enough to warrant payment. It’s time to put the product to the test – With freemium, your app users will have enough time to test the product before deciding whether or not to pay for additional use. More precise targeting – Your marketing strategy will be more effective if you show relevant ads to your app users who are willing to click and visit the landing page. If you have partners who want to advertise inside your app, you can implement this model. People who see your affiliate ads will visit your partner’s website and make a purchase. However, because you will only be paid commissions on purchases, not clicks, you must carefully select what to advertise within your application.

Subject Matter Expertise: Considering the Role of a Subject Matter Expert in Business Software Development

What happens when a customer calls you to ask why their record didn’t sync through the integration? Can you find which of those 240,000 transactions is the failed one that they asked you about? How you achieve operational efficiencies with integration really depends on your business, but this cost reduction opportunity is probably there.

  • Let’s look at some ways different types of software can be monetized.
  • If a SaaS product is to succeed as a business, it needs to generate sufficient revenue to pay bills, pay investors or incentivise investors to provide operating capital to the business.
  • However, monetization applies when an end-user needs additional technical support, premium features, hosting services, and SaaS.
  • Therefore, developers or software owners think that it will be super easy for them to collect customer preferences and track their data.
  • You could sell access under your brand, or create free access with a “freemium” upsell.

Don’t let building the integration to support a partnership make it harder. 100s of ISVs and 1,000,0000s of their customers rely on Zentitle, allowing them to focus on using their software, never having to deal with the hassles and complexities of lesser licensing systems. While you won’t have to dedicate developer resources for white-glove enrollment, you will need a good customer-facing team who can facilitate the process for your merchants.

However, if they notice something that completely disrupts their experience, they will simply stop using your app and delete it. If you’ve tried everything and still can’t make money through affiliate marketing, that’s okay too. Once you’ve cleared your mind, you can go back and try affiliate marketing again.

By utilizing data analysis, the provider leverages data they collect about you, sells ads to advertisers who pay high CTMs to target you with ads and CTAs. A complete list of how to monetize your software with actionable steps on how to implement them for your business. Ali creates a paid, subscription newsletter with advice and deals that she sends out every month.

7. Disadvantages of Ads

However, there are a few challenges that publishers face when monetizing digital content. The best part about the software is that you can require users to buy a license to use it. If you provide false advertising, you’ll lose out on many potential customers. Within each of these, there is a range of avenues for publishers to take. Though, don’t think you’re all set just because you understand the strategy! The ability to use these strategies will develop over time, but it’s best to lay the foundation now.

monetization methods for software

As for merchant account onboarding, we offer flexible options to get users onto your system in the best way possible. Stax Connect can deliver a branded enrollment system within your software so you can fully own the process. Another option is to enable your users to sign up for payment processing through a white-glove service.


Software development is a very highly skilled, usually very iterative endeavour, requiring lots of time and effort, and many people-hours to produce a good output. Let’s look at some ways different types of software can be monetized. How to Get Software Licensing Right The First Time – White Paper Check out our practical guide to navigating the process of licensing, delivering, and protecting your software. Explore the software licensing lifecycle, and how to build a cross-functional licensing team. The use of commercial advertisements and contextual advertisements have been a foundation of software monetization since free software first hit the market. Advertisements can come out in many different ways such as text ads, banners, short commercial videos and other types of software advertisements.

Provide clear systems of record for items including customer relationship management (CRM; used for quoting, converting to orders, managing customer contacts, and account relationships), billing , and entitlement . The mother-daughter duo was in the process of buying a townhouse when their email chain with the title company was hacked. One of the biggest mistakes entrepreneurs make is limiting themselves to only one form of monetization.

In this way, you can grab more feasible opportunities for your software by refining and improving it over time. Thus, you’ll be able to stay ahead of the competition by quickly identifying R&D, business, and engineering needs. After measuring the data, your next mission is to segment them into your own category.

Pay-as-you-grow, on the other hand, is a model that anticipates increased need for a resource over time as businesses grow. In the case of Cloudinary, they anticipate that small businesses will require greater storage capacities as they grow. When just starting out, the tendency is to choose a price point that’s impossible to say no to, but you’re likely to end up with the customers that see the least value in your offering. If you’re solving a real business problem, customers should be happy to pay you the appropriate perceived value—and ideally more over time as you’re able to penetrate the organization further. In many cases with online services, if you’re not paying for it, it is likely the case that the provider of the application is monetizing you. The main example of this is Google and the numerous free services it provides to consumers such as Gmail, Google Search, Google Maps and many more.

Product News

“Freemium” software refers to any software that offers a trial version. An ecommerce site can contain your own products or links to affiliate products. You can even buy more space to ensure that any number of viewers can pass through your site at a time. Many games include an online store where players can buy extra coins or gemstones. If you believe Wordfence should be allowing you access to this site, please let them know using the steps below so they can investigate why this is happening. The App Store is responsible for 75% of all non-gaming revenue, despite having less than 15% of the global market share.

monetization methods for software

Experience with hackathons and open-source solutions, for example, shows that input from many engineers accelerates progress and makes the final product better. We use tested and proven pricing strategies to help emerging and enterprise clients expand with profitable growth. Uses a structured process for deep exploration of product and service bundling to more fully address customer segments and needs.

Dedicated Development Team

Licensing as a Service, a new method of software licensing, offers flexible and effective means of monetizing software products quickly and easily. In today’s marketplace, many software companies and device vendors are increasingly turning to flexible licensing solutions in order to optimize investment in the product roadmap and drive future business. Learn more as to why Licensing is becoming more popular as a Service.

Software Monetization Strategy – Getting Started: Three Starting Points

If this model works for you, you won’t have to reinvent the wheel or devise a complicated strategy. However, there are some pitfalls to be aware of when utilizing this app monetization approach. Now that you know which strategies smart digital publishers use to monetize content, you can try them for yourself. If you’re uncertain about doing too much at once, try one new monetization method at a time. This statistic is important because it highlights the importance of in-app advertising as a monetizing strategy for mobile apps. It also shows that the top 50 grossing games earn relatively low daily revenue, which suggests that developers should focus on in-app advertising as a more reliable source of income.

How to monetize your free software

Despite some implementation issues, this mobile app monetization strategy has long been one of the most popular. The integration is fairly simple; users do not have to pay to use the app or some of its how much do free apps make content or features, and A/B testing can be used to determine the best ways to place advertisements. When selecting this model, consider how to integrate it without jeopardizing customer loyalty.

This provides an additional revenue source for your SaaS business, which boosts your bottom line. Subscription/term monetization and SaaS deployments are showing the greatest planned growth in the coming 12–18 months. At the same time, 59% of respondents anticipate that SaaS deployments will grow as a percentage of overall software license revenue in the coming 12–18 months. While SaaS has demonstrated its growing popularity, more traditional deployments also remain relevant, with 25% of respondents anticipating that on-premises deployments will grow during this time. Nicole Segereris vice president of product management & marketing atRevenera. Building a valuable product is hard, but making it profitable is even harder.

Our robust platform enables you to fully own and monetize the payment details experience. Stax Connect supports you and your merchants every step of the way—from onboarding all the way to hardware and customer service. Payment enrollment refers to the process of onboarding users onto a platform that facilitates payments. Getting users onboarded to a payments platform requires a number of steps. There’s the underwriting process, which vets merchants and ensures that they’re qualified to take payments.

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