The Vendr Q2 2023 SaaS Trends Report shows that software buyers are consolidating their tech stacks and reducing spending on new products, while sellers are increasingly focused on price transparency. The report predicts discounts will disappear, incumbents will benefit more from the AI surge, and suppliers will offer more features and products in comprehensive suites. The report highlights that the average Annualized Contract Value (ACV) for all SaaS transactions through Vendr has dropped by 45% between Q1 and Q2, indicating that buyers prioritize efficiency by opting for fewer seats, choosing the most affordable tier, and reducing expenses. The report predicts pricing transparency is coming, and discounts will disappear as more companies streamline sales teams. Moreover, the report predicts that the AI surge will benefit incumbents more than startups and stack consolidation will lead suppliers to offer more features, tools, and products in comprehensive suites.
Why do we care?
It’s appealing to hope that AI will bring a new set of disruptors to the big tech companies. That seems less likely, especially considering the cost of building a large language model.
SaaS costs aren’t coming down. Instead, customers are streamlining. Fewer seats, the more affordable option, reducing expenses. That’s good; you can help here.
Price transparency, in this case, is about the removal of discounts. See this as more the ecommerce-ification of software and less about some idea of lower prices. This is a significant trend. Buyers expect to have insights into software costs… that won’t be restricted to just software. It’ll extend to services too. Prepare.