While inflation may be coming down a little bit, the fact remains the labor market is tight, and businesses are still seeing increases in their overhead costs. If you are a business not selling software, you are likely feeling this from all avenues – including the price of software subscriptions. Indeed, subscription prices are increasing because software companies are also dealing with increases in overhead.  

In this blog, we wanted to share the increases we are aware of for several vendors that many companies use. This is not a definitive guide but simply serves to show you what increases you can expect from your software vendor when you renew this year. Despite the price increases, there are still ways you can optimize your costs – utilizing software asset management and software managed services to do so.

Key price increases

IBM: 24% price increase in specific currencies

All Passport Advantage Eligible Perpetual, Subscription License, Monthly License, Fixed Term Licenses, and Appliances will see the following adjustments:

• 19% increase: Canadian Dollar
• 24% increase: British Pound, Euro, Danish Krone, Japanese Yen, Norwegian Krone, South African Rand, Swedish Krona

All Passport Advantage Eligible SaaS Products will see the following adjustments:

• 5% decrease: Swiss Franc
• 7% increase: Indian Rupee, and South Korean Won
• 10% increase: Canadian Dollar
• 15% increase: British Pound, Euro, Danish Krone, Japanese Yen, Norwegian Krone, South African Rand, Swedish Krona
• Microsoft: 10% increase on certain editions

Microsoft announced a 10% increase, as of January 1, 2023, on SQL Server Enterprise, Standard, and Web editions.

As well as starting February 1, 2023, Indian rupee prices for commercial on-premises software will increase by 4.5%, online services will increase by 9%, and Windows GGWA will increase by 11% to realign close to prevailing USD pricing levels in the Asian region.

SAP: 3.3% increase in support fees

Effective Jan. 1, 2023, SAP announced a 3.3% increase to the annual support fee for SAP support agreements. It is unclear if there will be any additional increases this year.

Oracle: 8% increase in USA

Oracle raised their prices by 8% in the US and will be rolling out increases commensurate with inflation in other regions as the year progresses. Expect to see increases across the globe this year and into 2024.

With the price increases, whether you are considering exiting or renewing, we have recently written a great guide to get you on your way. You can find that blog here.

Optimizing costs in tough times

Despite price increases, your business can still manage its software subscription costs. To prepare for the future, especially with the current uncertainty, your business should be prepared for increases later this year and as we move into 2024. For the immediate future, you can optimize your costs by preparing to negotiate contract renewals and looking into third-party managed services and software asset management (SAM).  

Negotiate contract renewals
Even if your business has not negotiated renewals in the past, now is the time to do so. A good negotiation comes from a strong and informed position when it comes to what you own and what you need. This process can take months, so starting sooner rather than later will be immensely helpful. You can also enlist the help of Connor to determine what your software usage is and make sure there is no repetitive or redundant software you’re paying for but not using.

To be as informed as possible going into a negotiation, make sure you have the answers to these questions:

• What are you paying for that isn’t being used?  
• What might you need for future employees as you grow? 
• Is there a more cost-effective way to purchase what you need? 

Managed services and SAM

According to Gartner’s 2022 Critical Capabilities report, “Through 2025, organizations will save more money using proactive SAM than negotiating lower prices with software and cloud providers.” So, while contract negotiation can help, ultimately keeping a close eye on your software and actively managing usage and licenses can save far more money.

Managed service providers are experts in proving internal resource support through lifecycle change management and optimization activities, transforming existing practices to deliver transparency, and optimizing practices intended to support yearly negotiations as an integrated part of the process.  

If you’re seeking a more robust way to manage IT spend and ensure you are prepared for what lies ahead with software price inflation rates – reach out to our experts. You can also read our recent blogs on the topic to help you prepare for a potential recession with IT asset management, as well as how to leverage IT visibility for more effective software asset management.

Connor, your partner for success  

Having an effective SAM process integrated with IT visibility allows you to take corrective action when you do find an issue with your assets as quickly as possible. By partnering with Connor, you have the benefit of working with a partner that is an expert in SAM and prides itself on being able to produce the greatest ROI for your organization.   

Schedule a time to meet with one of our SAM experts to learn more about how Connor can help you prepare for the future of business. To learn more about our SAM services or to speak to an expert, please email us at softwareadvisoryservices@connor-consulting.com. 

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