Inflation means businesses face price hikes of up to 24 percent from technology suppliers that try to squeeze margins.
Research from ITAM Review – an independent global community for global IT asset management, software asset management and licensing professionals – shows that the continued impact of Covid-19, rising inflation, rising energy costs and geopolitical uncertainty have driven up software prices. Printers across the on-premise and SaaS product lines in the 2022/2023 financial year.
IBM has increased pricing on its “Passport Benefit Eligible” plan in January 2023, including perpetual and subscription licenses. The move saw a 24 percent increase in the UK, the Eurozone, Denmark, Norway, Sweden, Japan and South Africa. Canada grew by 19 percent.
Another major mover was Microsoft. The Redmond giant’s “price equalization” efforts saw a 20 percent increase in premium software and a 15 percent increase in online services among Japanese users. Elsewhere, increases were between 9 and 15 percent.
Rich Gibbons, Managing Director of ITAM Review, said: “By examining the events highlighted 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 it. assets and high returns on investment.”
Software and cloud cost management should be a C-level imperative for all organizations, the report argues, as costs continue to rise and there is a lack of commensurate price increases among customers.
Other vendors were also seen to end their price hikes, albeit with modest increases from IBM and Microsoft. In July 2022, Oracle announced an 8 percent increase in support prices in the U.S. and a corresponding increase in inflation in other areas. Enterprise software provider SAP has announced a 3.3 percent increase in support costs starting January 1, 2023.
Another business issue facing technology users is M&As, the report said. “Mergers and acquisitions between software publishers will have a significant impact on future relationships, so it’s something that client organizations need to pay close attention to.
“A common method of quickly recovering some of the acquisition costs is to increase the focus on non-software compliance audits. Finding client organizations that use the software in different ways and/or amounts outside of agreed parameters can be seen as a relatively “quick win” in terms of generating new revenue.
Last year’s notable M&As included Oracle-Cerner, Tibco-Citrix, OpenText-MicroFocus and Broadcom-VMware. Among the resellers, Trusmark has acquired Livingstone. ®