SaaS Purchasing Insights: March 2023
SaaS has long been a hot topic, but it’s only now that we’re seeing an increased focus on how much it costs.
Since the beginning of the year, Microsoft, Shopify and Zoom have all announced imminent pricing changes, but they’re by no means the only ones. According to our data, 38% of SaaS vendors increased their pricing in the last six months alone and it’s likely that even more will follow suit.
But the narrative around SaaS pricing is changing. It’s no longer solely focused on the vendors that are increasing prices, but rather the companies that are reducing spend.
Just take the recent announcement that Twitter is cutting its annual Salesforce bill by $15 million.?
While it’s easy to assume that this move alone was a result of recent layoffs, the reality is that it would have been able to cut back on its SaaS costs regardless.
This is because cost-saving opportunities exist in almost every SaaS stack. After all, the average business is overpaying for SaaS by 20-30%. Often, more.
So, what’s the secret to reducing SaaS spend??
The first step is to leverage pricing benchmarks — in other words the intel into what other companies are paying for any given piece of software. The second? To right-size your existing SaaS stack.?
Something that is made easier by understanding how software is currently being used within your business.?
Here are our SaaS purchasing insights for March 2023.
One third of SaaS spend goes to waste
Data from Vertice has found that 33% of SaaS licenses are underutilized across the average business. In departments such as marketing, product and sales, it’s even higher at 44%, 45% and 52%, respectively.?
When you consider that companies are using an average of 110 SaaS tools, that’s a substantial amount of spend going to waste.?
The problem is, many organizations are effectively blind to this issue, as they don’t have full visibility of the applications in use across their business, let alone an understanding of which licenses are being utilized.?
With our latest usage analytics and discovery release, Vertice now makes it possible to get detailed insights into both. Learn more here .
Sales teams spend more on SaaS than any other department
As if it wasn’t enough that 52% of sales software licenses are either barely used or not used at all by the intended employee, sales teams are spending substantially more on software than any other department.?
In the average organization, sales tools account for more than a fifth of total SaaS spend.
But while these tools play a critical role in any organization’s revenue stack, there are almost certainly ways to drive down the cost. And we’re not just talking about right-sizing licenses — although that is of course one way to reduce spend.
With the average real price paid for sales SaaS being 22% lower than list pricing , it’s almost always possible to negotiate a discount. Having analyzed 50 of the leading vendors in this space, we’ve found that some of the vendors offer an average discount of more than 35%. This means that for certain tools, it’s possible to secure well beyond 50% off of list pricing, representing a substantial saving.?
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What’s trending in SaaS?
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 March are:
Vendors with the most seamless renewal process
Of all the vendors we work with, Calendly , HiBob and Miro provided the most seamless renewal process for our customers this month.
Vendors with the 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.