26th October, 2022
TABLE OF CONTENTS
The process of SaaS buying has become complex as a wide range of options is available. Furthermore, challenges like change in the procuring team and increased purchases from third-party marketplaces add to the complexities.
This post will discuss the top trends that influence SaaS buying decisions.
A wide range of options makes the SaaS buying process complex. As new technologies, products, services, and suppliers emerge, IT procuring teams can consider options and solutions while buying SaaS is expanding. These dynamics make it difficult for the team to make purchases.
The SaaS buying process involves a team of decision-makers. Each member of the team collects pieces of information for the SaaS solutions. The team discusses this information to make a final and better decision.
Additionally, if any team member is replaced for specific reasons like a change of team, leaving the organization, etc., it adds to the challenges in the SaaS buying process. Change in the procuring team members increases the complexities in the SaaS buying process.
Suppose the procurement team decides to purchase a new solution at the time of renewal of the existing product. The team which existed during the originally procured SaaS product will have better knowledge about the requirements. On the contrary, if the decision-makers are changed, the buying process will begin from the beginning.
The new team will be required to understand the requirements for which the existing tool was procured and gather information about the solution. Also, it will be difficult for them to understand the reasons for replacing the existing one with a new one. These will be the added steps to the SaaS buying process of a new solution.
While procuring a new solution, the IT procurement team looks for fewer obstacles in the buying process. Adding a new solution to the technology stack should streamline and simplify work instead of making it a complex process.
This post will walk you through the top five SaaS buying trends.
An organization's primary goal is to maximize the overall return on investment. The decision-makers invest in procuring new solutions to simplify the work of the employees in the organization. This simplification of work will improve productivity so that the ROI maximizes.
ROI is one of the major factors that influence the SaaS buying process. Before any procurement research, the primary goal is to earn profit. The research for the best solution begins with the primary goal.
Various points can be taken into consideration for meeting the primary goal. This includes pricing, qualitative solution, renewal charges, and maintenance cost, and the most important one is to meet the requirements of the employees.
For example, the IT procurement team purchases project management software for the employees in the organization without knowing the requirements. The employees use the software for a few days and decide not to continue because it doesn’t resolve all the problems they face.
The above situation will disrupt regular operations. As a result, it will impact the overall workflow and, furthermore, the return on investment.
Sometimes, the software pricing does not impact the SaaS buying directly. The decision-makers are ready to invest with higher pricing if the solution offers high productivity. When there is an increase in productivity, there will be an increase in returns.
Considering the previous example, if the procurement team has purchased the right project management tool, it will help the employees manage their projects and complete them before the deadlines. This will increase productivity leading to ROI optimization.
SaaS subscription renewal prices increase year by year. The increase in pricing leads to a search for an alternative to the existing software. The decision-makers look for lower-cost software and replace the existing software.
For example, in Salesforce's current contract or master service agreement, they have an increase of 7% in renewal price every year. The organizations will look for an alternative and minimize their SaaS spending.
Additionally, there are many options available in the SaaS market. For this reason, decision-makers can switch to any lower-cost SaaS products at the time of renewal. Further, the team has insights into app usage. Based on the utility of the app, they make the decisions.
If the utility is high, the dependency is high on the app. The decision-makers will take time to determine the best option available. On the other hand, if the utility is low, then the dependency is less on the app. In this case, the decision-makers desperately search for a cheaper alternative. Hence, minimizing the SaaS spending.
Zluri, a SaaS management platform, offers app insights and manages the SaaS apps of your organization. We provide you with the usage data of your SaaS apps. This will help you make strategic decisions and optimize your SaaS spending.
Previously, the companies purchased SaaS apps from vendors. But now, the rate has declined. There are multiple reasons for the declining rate of buying SaaS directly from vendors. Instead, the companies prefer buying from third-party marketplaces or value-added resellers (VAR).
The organizations are flexible with buying from VARs because they offer value-added services like training, support, interest to connect with your business and understand it, etc. These added services get the attention of the organizations and interest them to procure SaaS apps.
Buying a SaaS solution is an enhancement of your IT infrastructure. Also, it will bring you pain in a few areas as you do not have expertise on the product initially. But if you want to get the full benefits of the solution, then you need to get the right support and process. This is where VARs replace the vendors.
Additionally, VARs deal with multiple vendors. Hence, they can offer you with a wide range of SaaS apps to fulfill your requirements in an organization. Also, they can recommend the most appropriate solution, which will help you to address the issues.
Most companies procure SaaS with a subscription-based pricing model. This is a standard pricing model offered by SaaS providers. In the subscription-based pricing model, organizations must pay a monthly or annually recurring fee.
The recurring amount is decided upfront before the purchase of the software. It is usually calculated based on the number of licenses purchased for the year. But sometimes, the difference between the number of licenses purchased and the actual usage of licenses is vast.
For example, your organization purchased 1000 licenses for Trello (project management tool). Whereas the actual license usage you find out to be 760. This means you are paying extra for 240 licenses. This increases your SaaS spending along with a contribution to SaaS wastage.
If the purchase is made based on usage, then your SaaS spending can be optimized. You pay only for the licenses your employees have used. This is where the usage-based pricing model comes into play.
Usage-based pricing models shift the relationship between the SaaS providers and your organization from an unfair subscription model to value for money. The pricing model optimizes your SaaS spending and overall ROI by making you pay for what you use.
The usage-based pricing is an influencing factor in SaaS buying. The IT procurement team is shifting to solutions that offer usage-based pricing. Moreover, it allows you to start at a lower cost and then increase slowly as per your usage. It is further eliminating the headache of procuring a new solution.
For instance, VMWare, a cloud computing software, offers pay-as-you-grow for its cloud services. They are using it as their USP to make the organizations procure their software.
Similarly, if you find such a solution offering usage-based pricing, the chances are higher to influence your SaaS buying decisions, as the end goal is optimizing your SaaS spending and growing your business.
The self-serve model is a convenient solution for the SaaS world. Convenient because the user is in control of their own customer service. In this, you can avoid the help of any support team. Also, reduce the waiting time to meet your requirements.
Self-service models have pushed an increase in the purchase of SaaS. The model has led individuals to purchase a SaaS app without waiting for the permission of the IT teams. This is because they can find solutions to their problems on their own.
The model has impacted the SaaS buying process. The employees choose the SaaS apps as per their requirements. The SaaS apps are easily accessible, and you can compare the alternatives online.
Suppose you are looking for an IT asset management tool. You can search for it online and get numerous websites showing a list of ITAM tools. Once you scan them and list down the best 5 ITAM tools, you can view the ratings at sites like G2, Capterra, etc., and make the decision to purchase the tool that satisfies your needs.
The model leaves the individuals an open space to procure the SaaS apps with the consent of IT teams. This influences the SaaS buying process. Further, it educates the end users to resolve their issues without consulting with your team.
Additionally, the self-service model has reduced the expenses you spend in consultation with experts to procure SaaS apps. It saves both time and money. Also, it reduces the effort of answering the basic questions by the SaaS support team. This gives the freedom to support the team in responding to serious queries.
Zluri offers an Employee App Store (EAS) that automates the SaaS buying process. It is connected to our SaaS buying service. You can purchase the approved SaaS apps on your own as per your requirement.
For example, Trello, a project management tool, has been approved by your IT teams. Now, an employee from the marketing department wants to use the tool. With Zluri, the employee can procure it from the employee app store.
Moreover, it saves IT and procurement teams countless hours on repetitive tasks of buying SaaS licenses.
An obese SaaS stack leads to SaaS wastage. It's a disease! It not only causes financial issues but also gives you security and compliance problems. That's why you must keep tight control on your SaaS stack. And it begins with managing your SaaS vendors.
In this post, you'll learn about shadow IT due to SaaS apps. You'll also learn the most common types of shadow apps categories, shadow IT risks, and shadow IT benefits.
Zluri's Modern IGA solution helps companies mitigate security and compliance risks. Govern access to your SaaS for the entire user lifecycle through user provisioning, automated access reviews, and self-service access requests.
When an organization has a large number of SaaS applications in its SaaS stack, it gives rise to SaaS Sprawl.
SaaS operations consist of procuring the right set of SaaS apps, managing access to these apps by users/departments, monitoring their usage, and offboarding them properly when they are no longer needed.
Ensure your business is thriving with our comprehensive Master Service Agreement Checklist. Don't leave crucial details to chance - get started today!
Unveil the top 7 contract renewal process best practices to streamline the associated processes and maximize successful renewals for a thriving business.
Explore the various types of purchase orders and discover their significance in procurement. Ensure smooth transactions with the right PO type.