Adobe’s acquisition of Figma, a collaborative design platform, for nearly $20 billion marks a yearly trend of robust M&A activity in the SaaS market. From new product bundles to volume discounts to leveraging the use of a competing product, vendor M&A activity can lead to savings if you have the right data. Alternatively, if you don’t have full visibility into your SaaS environment, or if you’re relying on manual processes and spreadsheets, you may be missing out on the following SaaS savings opportunities after M&A.
Navigating product bundles
Let’s start with product bundles. SaaS providers typically have widely disparate pricing depending on which tier of service you select. When they add functionality via acquisition, that often affects how they bundle features and functions within tiers and how they price those tiers. Complete visibility into your SaaS environment is crucial to negotiate effectively with SaaS vendors and avoid overpaying for features your employees don’t need. Login or billing information isn’t enough.
Gather data at the user level where you can discover paid as well as free applications and see which features users are accessing. A clear picture of the software you have, how your employees are using it and the value it’s providing to them is essential. You’ll be in a better position post-acquisition if a vendor presents new pricing based on new tiers and functionality. It’s easier to distinguish new capabilities that may represent a gap to be filled or features you can live without.
Take Adobe Creative Cloud, for example. They have two main bundles — Single App, and All Apps. When an employee is using at least three apps, it generally makes sense to purchase the All Apps bundle. The cost difference between the two bundles is around $50.
Adobe may decide to bundle Figma into Adobe Creative Cloud. Let’s say that’s the case. You’re an Adobe Creative Cloud and Figma customer with employees using more than three apps on the All App bundle. You’ll get even more value from your investment and can cancel your Figma subscription. If, however, an employee is only using Figma and one additional app, the Single App license may make more sense. It’s critical to have that visibility into usage. Not only will you choose correctly for each employee, you’ll capitalize on SaaS savings after M&A events like this one.
Managing volume discounts
Most software and SaaS providers offer pricing discounts based on how many licenses you purchase. When a centralized IT department purchases all software, it’s easy enough to track purchases with each vendor and negotiate accordingly. Nowadays, that’s rarely the way things work with SaaS procurement. Business units and even individual employees are making purchasing decisions independent of IT more than ever.
When two well-established vendors like Adobe and Figma merge, you might find that you’re suddenly a much larger customer of the combined entity than you were of each vendor individually. It’s critical to have complete visibility into all SaaS in use throughout the organization when that happens. With it, you can negotiate from a position of strength and leverage your size to achieve pricing power.
Taking advantage of competition
When one company acquires another, there are any number of ways the new, combined entity can take shape. The options range from business as usual to complete integration and everything in between. Regardless, the new, combined company will have an interest in making sure its customers use as many of its offered capabilities as possible.
If, for example, you’re using a competitor of the acquired company, you may find there are incentives available if you switch. Once again, complete visibility into your current SaaS environment puts you into the best position to take advantage of this opportunity if it arises.
The future of SaaS savings after M&A
To learn how Snow Software provides visibility into SaaS environments, you can review our guide to SaaS discovery methods. Interested in more? Check out how Snow addresses SaaS management to optimize software costs.