TRENDING
Almost three-quarters ( 73 %) of software vendors increased their prices in 2023 .
8.7 % comes from growth in prices . The remainder is driven by adding more users ; introducing new software tools ; and – most worryingly – the rise of ‘ SaaS shrinkflation ’.
Among Vertice ’ s customers , more than a quarter ( 28 %) of contracts have been impacted by shrinkflation , where vendors charge the same price for reduced functionality as they look to increase revenues in tough economic conditions . Vertice has seen a rise in the use of opaque techniques to hide decreases in real value – including ‘ bundling ’, ‘ unbundling ’ and ‘ currency harmonisation ’.
Eldar Tuvey , CEO and Founder of Vertice , said : “ While consumers across the world face a cost-of-living crisis , businesses are facing their own cost of software crisis , with costs rising much faster than last year , as vendors look to grow their top lines in a challenging macroeconomic environment . The growing prevalence of SaaS shrinkflation makes software pricing more difficult to navigate than ever .
“ For businesses across the world , there is a pressing need to manage their cost base in order to allocate their resources to more productive areas and ride out the global downturn in better shape . Getting value for money starts with gathering accurate information and asking vendors lots of probing questions , for example : ‘ What are other companies like us paying for their licenses ?’
“ Efficient businesses are not only more likely to turn a profit or avoid cashflow problems , but they are also less vulnerable to being forced into making redundancies that reduce productivity . Leaders should look to technologies that can control and centralise the software stack , provide visibility into software pricing and support them with contract negotiations .” p
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