SaaS purchasing insights for May 2023
Aimee Manning | MAY 10, 2023
Another week, another price increase. Or so it seems. In the last month alone, Shopify’s pricing increase came into effect for its existing merchants, Microsoft hiked its costs by at least 9%, and Google Workspace upped its prices for users with more than 10 licenses.
Here’s the thing though – it’s not just these leading SaaS players causing your software spend to surge. And it’s also not just the vendors that clearly communicate their price rises.
At Vertice, we’re beginning to see more and more mid-sized vendors increase their costs in more subtle ways.
Just recently, we came across one software company that had raised its pricing by as much as 40%, simply by removing its lowest priced tier – in turn forcing its customers onto a higher plan type with extra features. For many, unwanted features.
We’re also continuing to see a shift from drawdown contracts to monthly usage models, effectively shifting users onto a new use-it-or-lose-it pricing model.
With SaaS more expensive than ever, it’s crucial that you are looking for ways to mitigate the impact of soaring costs and subsequently minimize SaaS spend.
To help, we’re continuing to share our monthly industry insights, along with exclusive data that you can leverage to negotiate better deals on your SaaS stack.
Here are our SaaS purchasing insights for May.
SaaS purchasing insight of the month
Average discounts for the leading finance providers range from 5% to 50%
While our data shows that the average price paid for finance software is 22% lower than the prices listed online, a closer look at the 50 leading vendors in this space has found that the average discounts do in fact range from 5% up to almost 50%.
But while even the most time-pressured finance leaders and procurement professionals are often able to secure some form of saving – assuming they haven’t lost track of auto-renewal deadlines and are subsequently paying for costly auto-pricing increases – for many, the savings are minimal.
Which means that there’s every chance you’re paying substantially more than you could be for your finance tools.
In our latest report, we’ve looked at all 50 vendors in more detail and provided practical guidance on how you can leverage the insights to ensure you’re paying the best possible price on your next purchase or renewal.
Trending SaaS vendors
Each month, we’ll be looking at the top SaaS vendors by transactions and tracking their monthly movements.
As of this month, Salesforce remains the leading software vendor based on the amount of new purchases and renewals we’ve seen go through. While Google has climbed the ranks to second position, up from eight back in March, vendors such as NetSuite, MongoDB and LaunchDarkly have consistently fallen in position over the last two months.
Despite also having experienced a slight drop, financial data platform, PitchBook, has remained in the top ten for the second month running, indicating a continued demand for high quality data amongst our user base.
The vendor that’s seen the most impressive increase in transactions, however, is Snowflake, jumping from position 178 in April to position 5 in May.
What goes up must come down – although not always in Salesforce’s case. Unfortunately, we haven’t seen as many purchases go through for Zapier, Kandji or Workable over the last 30 days.
Vendor of the month: Snowflake
With the biggest increase in transactions last month, May’s vendor spotlight is on cloud data platform, Snowflake.
With a global customer base, made up of more than 11,000 companies, and an annual revenue of more than $2 billion, it comes as no surprise that we’re seeing an increasing demand in users purchasing or renewing the platform.
According to Vertice’s very own Head of Purchasing, Nick Riley, “We are continuing to see the adoption of cloud based warehousing and analytics platforms that scale as our customers grow. Within this, we have seen Snowflake as the stand out supplier; customers valuing the ease of use, scalability and robust security and compliance capabilities”.
SaaS category spotlight: Data warehousing
If Snowflake’s growth is anything to go by, there is clearly a huge demand for data warehouse solutions, as more companies move their data to the cloud.
So much so that the data warehousing market is expected to grow 20% annually for the next five years, rising by $14.56 billion, according to research by Technavio.
The increased interest we’re seeing in these tools, not only Snowflake, but also the likes of Amazon Redshift and Google BigQuery, certainly supports this prediction.
But while these vendors have the greatest market share in this sector, there are other vendors worth mentioning including Oracle, SAP, IBM, DBT and Apache Hive.
As with any SaaS solution, however, prices for data warehouse solutions are rarely set in stone. In fact, according to our own data, the average discount for these tools is around 18% off list pricing, but for larger contracts it is often closer to 32%.
Reduce your software spend without compromising on your SaaS stack
While we’ve detailed the average discounts afforded to customers of both finance software and data warehousing solutions above, the question remains – how can you ensure you’re achieving the best possible discounts? And how can you achieve it in the least amount of time possible?
At Vertice, we not only have access to the pricing and discounting data for more than 16,000 SaaS vendors worldwide, but our team of experienced buyers will procure these tools on your behalf, ensuring the best possible cost-savings, all the while saving you a substantial amount of time.
Through Vertice’s platform, you can also manage your entire software portfolio in one place, providing you with total visibility of your renewal schedules and contract terms, as well as your utilization rates for each software application. Learn more about how Vertice can help you uncover your SaaS license usage here, or alternatively see for yourself how much you could be saving on your annual software spend with a free audit.