It’s never been a better (or worse) time to purchase procurement and tech solutions. It’s an odd situation. In short: We are living a tale of 2 markets.
On the one hand, “freemium” solutions will increase in 2015. But on the other, so will price hikes for large providers.
Since many practitioners like the approach of “penetrate and radiate” (or perhaps “penetrate and self-fund” is more apt), we expect providers will increase their provisioning of free or near-free solutions. On the other end of the spectrum, we expect to see price increases at high-end providers who’ve spent a lot of money on acquisitions and now need to earn their money back.
Note price hikes can come in many forms. It’s not always cut and dry. Vendors can find new and creative ways to charge (and make money from) suppliers. Discounting and rebate practices can be reduced (or obfuscated). Providers can force certain bundles. And they can also increase costs for shorter duration (e.g., 3 years or less) SaaS deals in an attempt to drive to longer-term contracts.
Ahhh, pricing. And pricing power. It’s good to see that Porter’s Five Forces are still well in place!
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