- Software piracy is common in China, Russia and India, and increasing in Germany
- Many monitor but do not use telemetry, reducing observability
- Clear and functional pricing is essential to combat piracy
Despite increasingly stringent measures and the growing popularity of subscriptions, a third (31%) of software manufacturers believe that piracy is a major source of lost revenue.
New research from Revenera shows that unlicensed use is a major problem in China, Russia and India; Germany fell from 11th to 6th and seems mainly interested in engineering simulation and CAD software.
Despite the challenges, many software companies lack visibility into the use of their software: 30% of them collect telemetry data but do not analyze it, creating a serious blind spot, according to Revenera.
Unlicensed software is still a problem around the world
“Beyond compliance, usage insights can also help inform product roadmap decisions and prevent churn. But nearly a third of companies admit they ignore the usage data they collect, revealing a major blind spot that can sabotage revenue growth,” said Nicole Segerer, vice president and general manager.
While only 31% see piracy as a major problem and 25% see license abuse as a major problem, 43% and 41% respectively see it as a moderate problem, underscoring the extent of improperly licensed software.
According to Revenera, software makers should use AI to improve reporting, as it appears that about a third are wasting telemetry data. The need is clear: 8% do not even know exactly how they are losing revenue due to unlicensed software (compared to 5% last year).
The report also shows that converting unlicensed users to paying customers in markets with strict intellectual property rights laws is “highly possible” with the right tools and data.
“The most successful companies integrate compliance into their sales teams and treat breach data as a source of qualified leads to target,” says Segerer.
Going forward, Revenera says predictability is key to reducing unlicensed use. Many companies plan significant changes to their usage-based pricing until 2027. About two-fifths of them plan to introduce prepaid models (38%) and postpaid models (43%).
“Companies that view compliance as a business function and not as a means of complying with the law experience the greatest success,” the report concludes.
