Your Guide To Software Price Inflation In 2023/2024

Previously we wrote this article warning about the potential impacts that soaring software inflation rates would have on strained IT budgets.

As we predicted, several key software publishers released information about their increased prices – citing ‘inflation rates’ as a key factor.

Are your vendors on the list? We’ll be keeping this updated over the coming months.

Read the full article for recommendations on how to optimize costs.

Is your vendor raising their prices?

IBM:

2024

Further Price increases will come into play from January :
Passport Advantage 6% increase World Wide
MLC Software Products 6% increase World Wide
Appliance (selected) 12% increase
IBM Cloud services  3% World Wide with further increases of up to 7.5% Read more for specific regional changes

Effective 1 April 2024, Red Hat is making changes to Red Hat Enterprise Linux (RHEL) prices and introducing a new tier structure for virtual server instance pricing. Read more

2023

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 15%

Effective October 1st, 2023 increase for some regions between 1.3% to 5.4%  Read more

 Microsoft:

2024

Public Sector – Following the phased pricing update, Office 365 G1 will also increase in March 2024 by 10% and in March 2025 by 5%

2023

10% increase on certain editions

Microsoft has confirmed that as of January 1, 2023, a ten percent price increase will be imposed on SQL Server Enterprise edition, Standard edition, and Web edition.

SAP:

2024

On-Premise annual support fees to increase an average of 5% from January 2024 (Read more)

2023

Effective Jan. 1, 2023, SAP confirmed it will increase the annual support fee for SAP support agreements by up to 3.3 percent.

Oracle:

2023

8% increase in USA

Oracle already made moves in 2022 by raising their prices by 8% in the US and will be rolling out increases commensurate with inflation in other regions.

How can you optimize costs in tough times?

Prepare well for software contract negotiations 

A good negotiation comes from a strong and informed position when it comes to what you own and what you need. What are you paying for that isn’t being used? What might you need for future employees as you grow? How are your software publisher’s sales team being incentivized and on which products? Is there a more cost-effective way to purchase what you need? 

Remember that when it comes to cost savings on software spend, the earlier you start the better. Thorough assessments of your current spend and future needs can take months and you need to be prepared with accurate information when your software renewal negotiations come around this year.

Consider a managed service

Negotiation skills will get you pretty far, but over the coming months, this may not be enough to reduce the impact of software price inflation rates. 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.”

Using a managed service provider to support your internal resources combines an extra layer of expertise and a series of lifecycle change management and optimization activities, transforming existing practices to deliver transparency and optimization that makes yearly negotiations an integrated part of the process. They will establish a platform of more trustworthy data and leverage and augment your SAM tools.

We’re seeing a rise in the popularity of Software Asset Management services in organizations that are seeking more robust ways to manage their IT spend and ensure they are prepared for what lies ahead with software price inflation rates.

Anglepoint is recognized as a Leader in the Gartner Magic Quadrant for SAM Managed services for 4 consecutive years. If you want to learn more about our experience or seek advice on both cost savings and cost avoidance during these difficult economic times, don’t hesitate to get in touch with us below or check out our Software License Management and SAM Managed Service.

Estimate your SAM cost savings potential with our free online calculator.