Over the last few months, and especially in the last few weeks, not a few companies have been discovering that some of their software and service providers are raising the prices they are charged. So much so that in some cases increases are reaching 30% in a period of 12 months. The reason that many give for italways after asking for explanations, according to The Register, is inflation.
The relationship between current inflation and increases does not seem to add up much, since current inflation is much lower than the increases that in some cases have been applied to their clients. And when in some cases this has been stated, the answer is that current and future inflation are passing them on. It does not seem, therefore, a very acceptable reason for increases.
According to the author of the report that studies these increases in Gartner, Jo Ann Rosenberg, a provider of software as a service had increased its prices by 21% without offering any clear explanation to its customers. She only revealed that she was doing it for inflation after asking about the increase, claiming that she had to pass it on to clients.
Inflation is not the only reason that software and service providers are giving for these increases. The document cites an application maintenance service provider that sent a customer a fee renewal for its maintenance and support work with an 18% fee increase. In this case, the provider claimed that the shortage of available talent had pushed up their costs of personal.
But in most cases, companies blame inflation, sometimes very vaguely. And before the increases, Rosenberg advises ask for explanations details of the increases. He also notes that “vague and generic answers cannot be enough to explain or justify the fairness of these unexpected rises«.
In addition, it recommends cooling down the renewal processes through this request for explanations, and gathering economic data from the last year to support the claims and be able to make counteroffers. Above all, because the demands for the renewal of quotas with strong increases can be designed for making hasty renewal decisions. If necessary, the affected departments have to seek the support of board members, who can also support negotiations. Sliding prices and offers from other providers that are more advantageous can also help.
If possible, it also recommends wait until there are more financial incentives for quota renewals, until periods closer to the end of the fiscal quarter or until the end of the year. In these times, companies will have more pressure to meet the objectives and the commercial department needs to improve its sales figures, which can lead to its clients being able to obtain more advantageous agreements.
