Companies spent 25% more on software over the last twelve months, particularly finance departments, according to recent data.
The research, from SaaS management solutions firm
Behind the overall figures, though, there is major volatility on a month-to-month basis depending on the nature of the respondent's company.
For instance, the top quartile of companies actually had fewer software expenses on the net overall, like a 8% rise in January 2023 followed by a 4% dip in February 2023. This sort of volatility might explain the large range in spending figures in this cohort, who spent between $190,000 and $825,000 on software. Second quartile companies, meanwhile, saw a 12.9% rise in August 2022 and a 7.4% dropoff by May 2023. Third quartile companies saw their biggest spike in August 2022 at 8.8% and their biggest drop in June 2023 at 4.7%. Finally, fourth quartile companies saw the most significant increase in August 2022 with a 10% rise but also experienced the steepest fall of any group with a decrease of 11.1% in December 2022.
Taken together, all companies saw software spending peak in August 2022 at 7.4% but dip the most in December 2022 by 2.9%. These fluctuations, according to the report, indicate a highly dynamic market over the period. Overall, the researchers believe this indicates that companies, despite making major purchases, are being extra mindful of their budgets as they consider software spending.
"This growth signifies the enduring relevance and value of SaaS in the ever-evolving business landscape, as companies continue to invest in cutting-edge technologies to foster innovation, enhance operational efficiencies, and drive growth. However, amidst the price hikes and economic challenges, businesses are being more judicious with their SaaS purchases, opting for comprehensive suites overspecialized tools, and favoring products that have proven to be mission-critical. As we move forward, these trends hint at a significant shift in SaaS buying behaviors, marked by a more conservative, value-oriented approach to software procurement," said the report.
Finance departments, according to the data, were far and away the biggest spenders on new software over the past 12 months. Year-over-year spending by finance departments on software increased by 105%, a much bigger figure than the next closest corporate function, customer support departments, which saw a 79% spending increase.
"This surge suggests a major investment in financial software tools, driven by a need for improved financial analytics, forecasting, and management," said the report,
Meanwhile, both product departments and operations departments actually saw less software spending on net, dropping by 11% and 24% respectively.
