Over 90% of Companies Overpay for Project Collaboration Software: Report
Like popularity project collaboration software growing with other software-as-a-service products, a research report from SaaS Purchasing platform Vertice shows that more than 90% of businesses are overpaying for these tools.
According to a report by Grand View Research, which attributes the growth to factors such as the evolution of the workplace and, due to the pandemic, the need to implement effective team collaboration tools in different regions of the enterprise is increasing.
Another survey by research firm Gartner found that between 2019 and 2021, the use of SaaS-based project collaboration tools increased by 44%.
As the Vertice report shows, increased use of these collaboration tools has resulted in more than 80% of vendors increasing their prices by 10% annually since 2019.
Lack of pricing transparency is a problem
According to a Vertice report, a lack of pricing transparency is the biggest challenge for businesses when purchasing project collaboration software, leading to overpaying for these tools.
A scant 14% of software vendors selling project collaboration software list prices on their website or through third parties, the report found.
Non-disclosure of prices poses a major problem for businesses as they cannot compare prices from different suppliers, the company said in a report, adding that most project collaboration suppliers require consultation with their sales teams before quoting a price.
A lack of pricing transparency also plagues the broader SaaS category. Only 45% of suppliers display prices online, while 55% of suppliers hide prices from potential customers, a separate report by OpenView Venture Partners found.
Is long-term commitment the answer?
Looking at long-term commitments or multi-year contracts may be the only solution a business has when looking for discounts on project collaboration tools, Vertice said.
Currently, 89% of collaboration project providers offer discounts based on the length of the term, the report shows.
In addition, auto-renewal clauses in software contracts also drive up prices, Vertice said, noting that 91% of vendors have auto-renewal clauses in their contracts, and nearly 72% of project collaboration vendors have clauses that allow them to change prices in any time. given time.
“It is typical for suppliers to automate the cost increases that are passed on to customers,” the company said in a statement.