Software Monetization

Software monetization is a strategy employed by software companies and device vendors to maximize the profitability of their software. The software licensing component of this strategy enables software companies and device vendors to simultaneously protect their applications and embedded software from unauthorized copying, distribution, and use, and capture new revenue streams through creative pricing and packaging models. Whether a software application is hosted in the cloud, embedded in hardware, or installed on premise, software monetization solutions can help businesses extract the most value from their software. Another way to achieve software monetization is through paid advertising and the various compensation methods available to software publishers. Pay-per-install (PPI), for example, generates revenue by bundling third-party applications, also known as adware, with either freeware or shareware applications.

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 premise. 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.

Software constitutes a significant part of a software company or device vendor's intellectual property (IP) and, as such, requires strong security, encryption, and digital rights management (DRM). Depending on a company’s particular use case, they can choose to implement a hardware, software, or cloud-based licensing solution.

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