Green Alert : SaaS Giants may use Sustainability to Justify Price Hikes

upnorth

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Jul 27, 2015
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SaaS vendors plan to hike prices by between 15 and 20 percent in the next three years, and one of the justifications they’ll use is the cost of their environmental sustainability programs – despite expectations that those efforts would lower their costs.

So says analyst firm Gartner, which last week published a document, titled “3 Reasons Why SaaS Vendors Are Raising Prices and What You Can Do About It," which The Register has obtained. The document notes that sustainability regulations are likely to be introduced worldwide, so buyers will prefer SaaS vendors that are compliant. “Such a leading position means [SaaS vendors] can, and will in some cases, charge more,” Gartner suggests. But the analyst outfit thinks charging more for the cost of sustainable ops may not reflect actual costs, with the following argument: " Vendors may justify this premium cost with the cost of running or using green data centers (those run with renewable energy and using energy-efficient technologies). However, these data centers are designed to be more efficient, ultimately lowering costs. "
Gartner therefore recommends SaaS subscribers probe vendors’ sustainability claims to detect “greenwashing,” and quotes a European Commission study that found 42 percent of statements about sustainability practices on consumer goods companies’ websites “were exaggerated, false or deceptive, and could qualify as unfair commercial practices under EU rules.”

Another justification SaaS providers will offer for price rises is inflation, which has been on the rise around the world. Gartner advises checking the local rate of inflation, though, against SaaS price rises to make sure you're not being cheated.

SaaS stands for " Software as a Service ".
 

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