Project Collaboration Software
The ultimate pricing guide
It’s no secret that, given the expanding SaaS ecosystem, SaaS procurement continues to be a more difficult process than necessary for startups and enterprises alike. With low visibility into pricing and tool usage along with limited negotiation bandwidth, businesses are overpaying for SaaS products by between 20-30%, on average. Put simply, it’s time for a better way to purchase and manage SaaS.
This report provides a sector-specific analysis of project collaboration tools. First, we provide an overview of the sector and outline relevant pricing trends. Next, we include valuable insights into vendor “real” pricing and discounting from the Vertice database. Lastly, we provide guidance for business leaders looking to save time and money on SaaS procurement.
No man is an island.
When working remotely or on-site, teamwork is essential for boosting overall productivity and collectively achieving organizational goals. With the rise in remote working, fostering a collaborative work environment has become more important than ever.
If you don’t have the right set of tools to facilitate team collaboration, it becomes trickier to ensure projects are completed successfully and on time.
“Project collaboration software aims to increase the productivity of employees involved in project management by streamlining communications, collaboration, and remote work.”
Features of Project Collaboration Tools
In short, project collaboration software provides a variety of functions to help teams streamline project tasks and produce desired results more efficiently.
Valued at $27.40 billion and with a projected CAGR of 9.5% from 2022-2030, the project collaboration software market has seen significant growth in the last few years. Overall spend in this category is growing 20% annually is and expected to reach $145 billion in 2022.
A survey by Gartner found that between 2019 and 2021, there was a 44% increase in the use of collaboration SaaS tools. With this increase in usage, 80% of vendors have increased their list pricing since 2019 — by an average of 10% annually — making it even more crucial to find the best fit for your SaaS stack at the best price.
Visibility remains a key challenge in the SaaS purchasing process, making pricing transparency that much more important for SaaS buyers.
What do we mean by “pricing transparency?” Put simply, transparent pricing implies that you are not only able to see vendor list prices but that you also have insights into what other businesses are paying for their SaaS products. Having this knowledge will help you negotiate and secure the highest quality SaaS products for the best available prices.
While some vendors publish their pricing directly on their websites or through certain third parties, many SaaS companies intentionally keep their pricing hidden. Interestingly, research suggests that only 45% of vendors list pricing online, while 55% of vendors obscure pricing from potential customers.
Within the project collaboration sector specifically, data shows that only 14% of project collaboration vendors reveal their full pricing list online, well below the SaaS industry average.
Often this lack of transparency tends to work mostly to the vendor’s advantage. Most project collaboration vendors require a consultation with their sales teams before they will provide a quote. In other words, they require you to enter their sales funnel before giving any pricing information.
This widespread lack of transparency puts customers at a disadvantage since they are not able to compare pricing across a variety of vendors, which is a crucial step in making the best choices for their businesses.
This report aims to provide pricing and discounting insights that can help business leaders secure the best project collaboration software pricing available.
There can be stark differences between the list prices of software and what companies are actually paying for them.
Below we have compiled real pricing and discounting data for seven G2 leaders in the project collaboration software category.
Each rating is based on a combination of publicly available vendor pricing information and data from the Vertice database. Factoring each rating into our pricing clarity formula, we have generated a corresponding Price Clarity Score to aid businesses in securing the best pricing.
Across the seven vendors, businesses that choose to negotiate pricing are paying an average of $15.22 per month per user, securing an average discount of 22% off of list price. Data shows that businesses have been able to secure discounts in the range of 15-34%.
Vertice Pricing Ratings
From extensive pricing data from the Vertice database, we have developed three distinct pricing ratings for each vendor.
By making pricing unclear and difficult to understand, vendors often hold the most negotiation leverage. With a clearer understanding of a vendor’s pricing, you are able to gain back negotiation bandwidth and, most likely, secure a better deal.
Vertice Pricing Clarity Matrix
The Vertice Pricing Clarity score aims to provide business leaders with insight into how a vendor compares with its peers in terms of pricing simplicity, transparency and parity.
For each vendor, we’ve also analyzed average discounting — the aggregate price discount that customers pay compared with list pricing.
Managing spiraling SaaS costs can be a challenge, even when armed with the most comprehensive data.
Finance, procurement, IT and departmental leaders all struggle with getting insights into the purchasing process.
To break it down into a simple perspective, the amount of control a business has over any SaaS agreement depends on how much control it has over two key factors: time and leverage.
Committing to longer term contracts
Analysis of pricing models reveals that businesses can find savings by opting for longer term contracts. Currently, 89% of project collaboration vendors offer discounts based on term length.
It’s important to understand the relationship between auto-renewals and price increases.
Data shows that all seven vendors evaluated have auto renewal clauses in their contracts by default, making it important to keep a close eye on renewal dates.
Nearly a third of these vendors have increased prices in the last two years — it’s typical for vendors to automate the cost increases that are passed onto customers.
Across the project collaboration sector as a whole, 91% of vendors have auto-renewal clauses stipulated in their contracts, and of those that auto-renew, the most common notice period is 30 days.
Negotiating contract terms with leverage
The goal is to give yourself as much leverage as possible, and this often means taking a step back and thinking about the bigger picture. Finance teams need to take three key elements into consideration for a negotiation strategy to be effective.
Do you expect to switch tools in the foreseeable future? If you predict that you will likely need to switch tools as your business grows, it might be worth considering a contract with shorter terms so that you are not stuck paying for tools that will no longer serve your business in the long run.
Is the product scalable enough to meet future needs? Determine whether or not the vendor can scale its services to your specific business needs as your business grows. If the product is scalable, choosing a multi-year contract will help maximize the overall discount.
How much do you value price certainty? It is almost inevitable that prices will increase in the future. If you want to lock in a discounted price for the duration of a multi-year contract, a long-term contract would be the best option.
Vertice’s Pricing Clarity score for each vendor is based on an aggregation of their simplicity, transparency and parity ratings data.
Click on any vendor for more insights into their purchasing practices.
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Managing SaaS spend can be difficult since much of the negotiating power lies with the vendor, not the customer.
There are some techniques that can be employed to help balance the scales, but working with experts is by far the best approach to yield positive results.
9 tips to get your SaaS spend under control
The SaaS purchasing platform
Vertice’s database consists of over 13,000 SaaS vendors across more than 100 countries, with detailed product information and analytics on the most popular applications. We’ve amassed over 10,000 price points from multiple sources and have negotiated over 10,000 contracts with a total value exceeding $300 million for both fast-growing tech companies and Fortune 500 multinationals.
Vertice is committed to working only on behalf of the buyer, enabling us to remain independent of SaaS vendors and be 100% aligned with the interests of finance and IT teams at renewal. It’s about time that corporate buyers are equally represented by a professional partner — one that is backed by rich data and adheres to a rigorous purchasing methodology and framework.
With these principles in mind, this is how Vertice was built to work for your business:
1. We negotiate with vendors on your behalf, leveraging our extensive data on real, up-to-date SaaS transactions to get you the best deal on any contract.
2. We simplify the entire SaaS purchasing process, freeing your finance and procurement teams to focus on your core business.
3. We provide full visibility into your SaaS stack all in one place, enabling you to make the most informed decisions.
We deliver an enterprise-class solution designed specifically for finance, procurement and IT teams, and we’re ready to help you save time and effort on your endless SaaS renewals.
Learn how much time and money you can save using Vertice
based on the SaaS vendors your company uses today