SaaS Purchasing Insights: April 2023
Finance leaders have long been under pressure to minimize costs and maximize profitability, but the banking crisis of recent weeks, not to mention persistent inflation, has only added to their ongoing challenges.?
But while this has left many organizations considering the most drastic of cost-cutting measures, there is one area of business spend that continues to get overlooked — the amount being spent on software.?
This is despite the fact that SaaS now accounts for $1 in every $8 of total expenditure in the average business, not to mention that:
So, with pressure well and truly mounting and software prices continuing to rise at a rate that is four times faster than market inflation alone can account for, there’s never been a better time to get a handle on your SaaS spend and identify the cost-saving opportunities that exist within your existing stack.?
The best way to do this? Start by understanding what’s happening across the industry and use the insights and data to your advantage.
Here’s our monthly roundup of SaaS purchasing insights for April 2023.
Mid-sized companies are spending twice as much on SaaS per employee than enterprises
Our data shows that the amount being spent on SaaS per employee varies significantly depending on the company’s headcount.
As an example, enterprises with more than 5,000 employees typically achieve the biggest savings when it comes to software prices, for the simple reason that they can benefit from greater economies of scale and subsequently have increased buying power.?
On average, these organizations are spending $4,700 on software for every employee, almost $2,000 less than those with between 100 and 500 employees. But while these smaller businesses are still able to achieve better deals than most due to having fewer functionality requirements and being able to rely on a smaller software stack, it is the mid-sized companies that are getting hit the hardest on the cost of software.
More specifically, those with between 1,000 and 2,000 employees are spending $10,000 per person on their tooling, which is more than double that of large enterprises.
So, what does this tell us?
In short, that leverage is crucial when it comes to getting the best deals on software.?
But what you may not be aware of is that leverage doesn’t have to mean headcount. It can also be pricing intelligence. In other words, knowledge of what other companies are paying for their tools.?
Search through our vendor database here for exclusive pricing and discounting insights for thousands of SaaS providers.
Share of spend for AI tools has increased 500% since the start of the year
Since the launch of ChatGPT last November, artificial intelligence (AI) has not only dominated the headlines, but it’s also transforming the way businesses work. While the likes of Google, Microsoft and Salesforce are already starting to — or are planning to — add AI capabilities to their software, we’re also seeing an increasing number of companies emerge that specialize in everything from AI video and blog creation, to AI voice generation and AI meeting transcription software.
And these tools are in high demand across our network.
Our data shows that one in three companies are now using AI software, up from one in ten earlier in the year. This has resulted in the share of spend for AI tools increasing by 500% in just three months.?
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But, which tools are leading the way?
What's trending in SaaS?
Each month, we’ll be tracking the biggest movers and shakers with our SaaS trend forecast. In addition to highlighting our hot picks for April 2023, we’ve also looked at the SaaS providers that have been the most flexible with their pricing, as well as those with the most seamless renewal process.
Most flexible pricing
With SaaS prices continuing to soar, our expert team of negotiators have been working incredibly hard to secure the best possible deals for our customers.
This month, we’ve seen Loom, Apollo.io and Vanta lead the way by being the most willing to adjust their pricing to meet the requirements of their customers.
Most seamless renewal process
Of all the vendors we work with, TripActions, Greenhouse and Heap have provided the most seamless renewal process for our customers in the last month.
Hottest SaaS vendors for April 2023
Each month, we track the biggest movers and shakers in SaaS. These are the vendors that we’re seeing the most activity around and that are well and truly on our radar.
Topping the leaderboard in April are: