February 20, 2019

You are About to Get Hit by Google G Suite Price Hike

Google just announced a 20% price hike for its G Suite Basic and G Suite Business tools. For the over four million businesses using G Suite, it’s a reminder of the deal power of the world’s most popular cloud software company – and a testament to how quickly SaaS spend can jump.

For corporate CFOs and IT leaders, the announcement prompts an unsettling question: are we optimized to absorb the cost and manage unpredictable increases, or will we pay more for licenses we don’t use?

The merits of the hike aren’t the issue. It’s the reality that most companies are sitting on unused or underused license and eat price hikes as part of the normal course of business. Sure, the new price-to-value may make sense: Google introduced a bevy of AI, meeting and collaboration features over the years.

What matters is if companies are prepared operationally and financially to weather rising costs by eliminating wasteful spend and unused licenses.

Consider the example of a midsized G Suite customer:

A company with 2,000 to 3,000 users is paying $120 per user, per year, or $240,000 to $300,000 annually. This incremental price hike, while just a buck or two on the surface, may amount to over $50,000 per year. For just one tool.

It’s not the licenses you use that are costly, it’s the ones you don’t.

When new customers onboard with Cleanshelf, we review provisioned licenses versus utilization. What we find astonishes CFOs and IT leaders. Often, up to 25% of G Suite licenses are unused. Why does this happen?

Two key reasons:

First are the Offboarding Oopsies.

With G Suite, license provisioning is tricky. Generally, when an employee leaves the G Suite admin suspends the user account. But this is different than a deleted account. Companies still pay for access to the dormant, or suspended account. No one in finance notices when it’s one, two or three accounts. But after years of operation and normal attrition, companies find dozens or hundreds of unused accounts being dutifully paid for.

As well, startup companies get caught up in the frenzied hiring and growth hustle. This pushes less mission critical process development, like employee offboarding, to the side. But as the company matures, HR, finance, IT and the recently terminated employee’s manager get caught in an inefficient hunt to remove old licenses. Much of SaaS is rarely centrally managed by IT, meaning that the true picture of owned licenses is fuzzy. Companies can’t quickly review and deactivate services for employees who leave. And they’re far from being able to reallocate licenses to ensure optimal deployment levels.

The second is Data Dilemma.

Other times, admins keep accounts active because of data access concerns. G Suite’s essentiality to email, data sharing and document ownership leave admins cautious about deleting – and losing access to – critical data pieces. Effectively, they continue paying on accounts as means for data backup. Missed in this is the existence of cost-effective, third-party cloud-to-cloud data protection and backup services that can service environments of any size, for pennies on the dollar.

Recently, during a license utilization audit, Cleanshelf identified over 1,000 G Suite licenses for a mid-sized client. Further discovery was startling: of these licenses, only 760 belonged to active users. For years, the company had been paying thousands of dollars a month on purposeless SaaS.

Are you fully optimized to absorb the price hike?

G Suite’s price hike takes effect on April 2nd and any renewals thereafter will rollover with a 20% bump. It’s time to take a look at license utilization. Chances are you’ll find unused accounts – and likely enough of them to offset the new subscription expense.

We dared to take a step further. Based on experience we gained optimizing Google G Suite subscription for our customers, we’ve already identified best practices how to save money on your G Suite Subscription with minimal effort on your end.

Our free guide is ready for download to help you find the best option for you.

Technology prices are creeping higher for everyone. Today, it’s G Suite. Tomorrow, it’s any of the dozens or hundreds of SaaS tools deployed in your organization. Stop the surprises and take advantage of easy SaaS expense management, usage and optimization insights. The Cleanshelf team is ready to show you how you, too, can achieve immediate results.

 

About Cleanshelf

Cleanshelf is the leading SaaS spend optimization solution focused exclusively on tracking, controlling, and benchmarking subscription SaaS applications. Cleanshelf’s cloud technologies help companies save up to 30% on their SaaS spending by automatically identifying unused, underused, or unmanaged licenses and subscriptions.

Headquartered in San Francisco, CA, Cleanshelf serves dozens of clients, including Drawbridge, Revinate, Dynamic Signal, Qumulo, and Service Rocket.

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