The companies prefer to acquire business software in As a Service mode, compared to the traditional contracting of long-term licenses, the result of the price scale due to current inflation. This is one of the main conclusions of the report ‘Trends in SaaS contracting 2023’ prepared by Sastrify, a leading company specialized in the negotiation and acquisition of cloud software.
According to the document, this model could save companies up to 65% compared to other traditional contracting methods, as the subscription for monthly or annual payment, which will increase your choice. In line with the forecasts of the consulting firm Gartner, which predicts a 35% increase in the purchase and maintenance price of SaaS platforms by 2025, the Sastrify report concludes that the current economic situation will also affect cloud spending in Spain.
Report points to increased business concern highly digitized to optimize their technological investments. Thus, one of the first trends for this year will be the increase in contracts under pay-per-use subscription models.
According to the report, investors will demand this type of subscription since, exclusively, it is necessary to pay for the use or consumption of the software that is carried out, which allows them to optimize their spending. For it, are based on metrics such as the number of emails sent, the volume of data stored or the number of API calls.
In the same way, they indicate from Sastrify, many of these companies have already come into contact with this type of model because they even apply it to the clients of their own businesses. “More and more companies are looking for payment methods adapted to their specific needs, compared to models designed for mass use”says David Alonso, Country Manager in Spain at Sastrify.
“Mainly, to rationalize investments in a market with rising prices, but also to gain efficiency and flexibility as users. Companies seek to pay only for those tools that they use the most and that generate the most value: it seems obvious, but it is easy to fall into dynamics that lead them to the opposite”.
Inflation, the main reason for the increase in the cost of SaaS tools
The Sastrify report identifies two reasons as the causes of the increase in the price of SaaS tools that many players in the cloud world already anticipate. In the first place, the generalized inflation that the world economy is going through and that the sector has not been able to avoid, with the highest historical figure in the US since 1981 -last June it stood at 9.1%- and which reached double digits during various periods of the year in Europe.
likewise, as derived from price increases and in the face of a hypothetical recession, the document finds a second reason for the increase in the price of SaaS in the increased interest of providers in boosting customer retention through longer contracts as opposed to the search for new business opportunities.
Given this scenario, Sastrify points to a growing concern among companies that make extensive use of this type of tool to reduce their expenses. Although the consumption of these solutions will not diminish and large companies will use up to 96 SaaS platforms on average in their day-to-day activities this year, according to the report. In fact, in a recent report, the technology consultancy Gartner already reflected that the global SaaS market will reach a record figure of 675,000 million euros this 2023.
“Companies in which digitization and automation are part of the business core know that the use of SaaS is essential to remain efficient in inflationary times like these. However, among all the companies worldwide that make use of SaaS, Many have been able to recognize the current economic context as a great time to acquire software with minimal cost and risk for a clear competitive advantage”, points out David Alonso.
Increase investment in managers specialized in the acquisition of SaaS licenses
Regarding the main cloud markets for the acquisition of SaaS tools, the Sastrify report concludes that there has been a considerable increase in its number of users over the last year. A) Yes, Microsoft Azure Marketplace has registered 4 million monthly users, the Amazon Web Services (AWS) marketplace has reached 1.5 million subscriptions, and Google Cloud Marketplace has tripled its number of sales.
However, beyond the providers of large technology companies, the document predicts that by 2023 there will be an increase in the number of options available when purchasing SaaS solutions. Other firms have also spoken along these lines, such as Statista, which estimates that the number of SaaS providers this year will be around 25,000. Among them, the Sastrify report points out that, compared to previous years, direct sellers and trusted IT providers, as well as third-party marketplaces and resellers, will become more important this year. both ‘low-touch’ and ‘high-touch’.
Likewise, another trend that the report anticipates is a greater preference by companies for contracting licenses through managers specialized in this type of process, given that this type of firm, which brings together several companies that make use of SaaS platforms, take advantage of their collective bargaining power with solution providers to obtain better prices. This means savings of up to 25% for those companies that make extensive use of this type of service.
“SaaS providers are more amenable to negotiating offers and price reductions for subscriptions when the buyer is willing to purchase multiple licenses at the same time. Thanks to this practice, the end user not only optimizes his investments, but can also considerably reduce the time spent on contracting, in which an average of between one and six months can be invested ”concludes David Alonso.
