How does Panaya determine usage?

The Usage field relates to the Organization usage extracted, i.e. how often the component is used in the extracted usage time frame - 

Frequently Used The top 20% of all used components of a certain type under the same Organization
Normally Used The middle 60% of all used components of a certain type
Rarely Used  The bottom 20% of all used components of a certain type
Unused There is no record of the component in the Organization usage collection sources.

"Panaya will determine if an component has been Frequently, Normally or Rarely used by comparing each component relative to the other used component within a given Organization.

If the
component is in the top 20% of usage compared to other components usage in the same Organization, then we will label it ‘Frequently Used’. If it is in the lower 20% of usage compared to other components, we will label it ‘Rarely Used’. Those in the middle are labelled ‘Normally Used’.  

If a 
component was never used in the Organization over the course of all our accumulated historical usage data then we will label it as ‘Unused’."
 
See also