CV_Playbook_16_2

With the ever-expanding SaaS ecosystem and widening adoption of clouddelivered solutions, efficient procurement of SaaS solutions has become more crucial and complex for startups and enterprises alike. A survey by Gartner, for instance, found that between 2019 and 2021, there was a 44 percent increase in the use of collaboration SaaS tools alone, and with this increase in usage, 80 percent of vendors also increased their list pricing by an average of 10 percent annually All the while, low visibility into pricing and a limited ability to negotiation pricing has left businesses overpaying for SaaS products, argue executives at SaaS purchasing platform provider Vertice. Recent analysis by Vertice suggests as much as 90 percent of SaaS buyers are overpaying by an average of 20 percent to 30 percent. Vertice’s database consists of more 13,000 SaaS vendors across more than 100 countries, with detailed product information and analytics on the most popular applications. The company has amassed tens of thousands of price points from multiple sources and has negotiated more than 10,000 contracts with a total value exceeding $300 million. A major challenge in SaaS procurement, argued a recent Vertice report, is the lack of true price transparency. According to the company, “There can be stark differences between the list prices of software and what companies are actually paying for them.” While some vendors publish their pricing directly on their websites or through certain third parties, as much as 55 percent of vendors obscure pricing from potential customers. Within the project collaboration sector specifically, data shows that only 14 percent of project collaboration vendors reveal their full pricing list online, well below the SaaS industry average. That lack of transparency, of course, works mostly to the vendor’s advantage. In addition to preventing buyers from comparison shopping, it also forces them to enter the vendor’s sale funnel in order to get pricing information. Another challenge for businesses is a lack of negotiation bandwidth. According to Vertice’s analysis of project collaboration vendors’ sales, businesses that are able to actively negotiate pricing are paying an average of $15.22 per seat per month, securing an average discount of 22 percent off of list prices. In other SaaS segments, businesses that actively negotiate have been able to secure discounts in the range of 15 percent to 34 percent. Analysis of pricing models also revealed that businesses can find savings by opting for longer term contracts. Nearly 90 percent of project collaboration vendors offer discounts based on term length. And keep a close eye on autorenewal clauses, Vertice executives warned. Virtually all of the project collaboration vendors surveyed have autorenewal clauses in their contracts by default. That includes the nearly third of vendors that increases prices in the last two years. It’s not uncommon, after all, for vendors to automate the cost increases that are passed onto customers, said the report. J Controlling SaaS Overspend By Martin Vilaboy If y ur employer d ci es not to o†er opportuniti s for you to work remote some or all of the time long term, how likely would you be to look for opportunities for employment with other organizations? Source: Gallup List Price Vs. Average Price Paid Source: Vertice Exclusively remote % who chose “extremely likely” Hybrid On-site 37 60 19 29 11 15 June 2021 June 2022 Most Productive Day for Workers 46% 40% 35% 43% 31% 29% 27% -01 2022-04-01 01 2022-04-01 34% Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 6 Vendor 7 Price Per User Per Month $0 $5 $10 $15 $20 $25 $30 $25.00 $18.75 $24.99 $16.50 $24.80 $20.83 $19.00 $15.20 $18.00 $15.30 $16.00 $11.68 $10.00 $8.30 List Price Average Price Paid 18 THE CHANNEL MANAGER’S PLAYBOOK

RkJQdWJsaXNoZXIy NTg4Njc=