Inflationary pressures mean businesses have faced price increases of up to 24 percent from tech vendors attempting to claw back margins.
Research from The ITAM Review – an independent global community for worldwide IT asset management, software asset management, and licensing professionals – has found the ongoing effects of COVID-19, rising inflation, soaring energy costs, and geopolitical instability have fueled price increases from software publishers across on-premises and SaaS product lines during the 2022/2023 financial year.
IBM increased prices in January 2023 across its “Passport Advantage Eligible” scheme, including perpetual and subscription licenses. The move meant a 24 percent hike in the UK, Eurozone, Denmark, Norway, Sweden, Japan, and South Africa. Canada saw a 19 percent increase.
Another major mover was Microsoft. The Redmond giant’s “price harmonization” effort saw users in Japan hit with 20 percent increase for on-prem software and 15 percent for online services. Elsewhere rises were between 9 and 15 percent.
Rich Gibbons, managing director at The ITAM Review, said: “By examining the events raised in this report and their impact on business decisions and budgets, this paper aims to equip IT professionals, executives, and stakeholders with valuable insights to proactively manage their IT assets and maximize returns on investment.”
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With spending increasing and no commensurate increase in value being received by customers, software and cloud cost management must be a C-level imperative for all organizations, the report argues.
Other vendors saw fit to jack prices, although at more modest increments than IBM and Microsoft. In July 2022, Oracle announced an 8 percent increase to their US support prices as well as inflation-commensurate rises in other locations. Fellow enterprise software vendor SAP announced a 3.3 percent increase in support costs from January 1, 2023.
Another commercial issue facing tech users was M&As, the report said. “Merger and acquisition activity among software publishers is something that customer organizations should pay close attention to as it can have a profound impact on future dealings.
“A common tactic to quickly recoup a portion of the acquisition costs is to increase the focus on software non-compliance audits. Finding customer organizations who are using software in ways and/or quantities outside of the agreed parameters can be seen as a relatively ‘quick win’ in terms of generating new revenue.”
Prominent M&As over the last year include Oracle-Cerner, Tibco-Citrix, OpenText-MicroFocus, and Broadcom-VMware. Among resellers, Trustmarque acquired Livingstone. ®
