Despite the unfavorable economic conditions of 2023, many companies are continuing to invest in new software solutions in a bid to remain both innovative and competitive.Just look at the data – over the past 12 months, the number of software applications in use across the average organization increased by 18%, with SaaS spend per employee growing by 27%, up from $6,220 to $7,900.But with software adoption showing no signs of slowing down, you may be wondering which tools are in high demand.In other words, which SaaS categories are modern organizations continuing to invest in and what are the trending tools within each of these categories?Below, we’ve provided a month-by-month breakdown of the most popular SaaS products that have been purchased over the past 12 months, along with exclusive data into the average discounts for each.,
Most popular new SaaS purchases in 2023
Throughout any given year, the vast majority of companies will renew more software applications than they purchase, and this was certainly no different in 2023. But while these renewals typically account for around 85% of SaaS spend in the average month – with only 15% allocated to new purchases – we saw this drop to 77% back in Q1, meaning that companies were investing significantly more in new tools during this time period than they did at any other point in the year.And it comes as little surprise, given how budgets typically reset in Q1 – especially within companies that have applied zero-based budgeting – encouraging leaders to actively explore new types of SaaS solutions, while also considering alternatives for the tools they’re already using.According to our Head of Buying, Nick Riley, companies that purchase software at the beginning of the year are also typically exposed to more lucrative discounts., "If you're planning on buying new software this year, Q1 is the best time to do it. In our experience, suppliers are desperate for new logos and we therefore tend to see average discounts become incredibly high during this time.", Ultimately, with SaaS prices rising, it's imperative that you're doing all you can to get the most value from your budget – something that's made all the more challenging thanks to the overwhelming lack of pricing transparency across the industry.Knowing what other similar companies are paying for any given tool and how you can use this intel as leverage in negotiations is therefore crucial for keeping your spend to a minimum.,
Hottest SaaS replacements
While companies are experimenting with new technologies, many are also simply switching vendors.Which raises the question of which SaaS products are being replaced the most?Across our user base, we’ve seen sales and marketing intelligence platform, Apollo.io, replace both ZoomInfo and 6sense – the most common reasons being cost and improved functionality. In fact, this type of software was among the most popular new purchase categories at various times of the year, indicating that companies are realizing the importance of pinpointing the right buyers and leads in order to gain competitive advantage.This isn’t the only common SaaS switch we’re seeing though.Many are also replacing sales engagement platform Outreach with Salesloft, which further highlights that organizations have become particularly hot on the tools that enable growth and support their go-to-market strategies.And it’s not just sales and marketing tools that are being replaced.A growing number of organizations have also been switching their Apple Device Management solution provider, with a significant number of companies moving from Jamf to Kandji.
Other takeaways
So, what else can we gauge from the data?Well, if the most popular SaaS companies for Q2 are anything to go by, companies have also been investing in new password management platforms, such as 1Password and LastPass – which comes as little surprise, given the rising importance of compliance.What did come as a surprise, however, was that AI software didn’t feature in the top purchases across any month in 2023. Especially given how the share of spend for these tools increased by 500% in the first three months of the year and then tripled to 3% between April and October.That said, we do anticipate that the AI boom will reach new heights in 2024, with our very own CEO, Eldar Tuvey, expecting to see faster adoption of AI software, particularly within the finance function., “CFOs will use AI to unburden their teams from mundane, time-consuming tasks like invoicing and contract analysis to free up resources for more strategic projects.”, Ultimately, with each software application requiring an average of five hours negotiation time, finding ways to reduce the time dedicated to procurement and renewals is key to securing the best possible deal on any contract – something that has become all the more challenging with software prices rising by a staggering 12% each year.,
Trending SaaS providers
We’ve showcased the most popular software categories throughout 2023, but which companies top the charts within each?,
, While there will – and should – be many considerations at play when it comes to evaluating new vendors, price remains a critical denominator.Ensuring that you’re getting the best possible deal on any contract is therefore key. While we’ve already touched on the importance of finding out what other companies like your own are paying for their software – intel that Vertice can provide – as a starting point it’s also worth understanding the average discounts typically offered by vendors across different software categories.,
Average discounts by SaaS category
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, To secure the best deal for your business, it’s also important to look beyond price and consider the terms of your contract.Knowing which contract clauses can be negotiated – and how – can help you achieve an even more lucrative deal.With a tool such as Vertice, you can also benchmark these contract terms against thousands of other customers to understand which clauses can be altered. Learn more about our Diligence Insights capabilities here, or alternatively see how much you could be saving on your annual software spend.,
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