Earlier this year, Google 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, CIOs and other IT leaders, the announcement prompts unsettling questions. Are we optimized to absorb costs and manage unpredictable increases? Are we paying 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 licenses. Not only do they not know about them, they don't want to know. Most companies have accepted that they have to 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.
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. Companies are often not using 25% of their G Suite licenses. 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 often find hundreds of unused accounts being dutifully paid for.
Frenzied hiring and the need to grow quickly at all costs also catches startup companies off guard. 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. IT has little to no central control of SaaS, 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 is vital for email, data sharing and document ownership, which leaves admins feeling cautious. They are wary 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. However, to their surprise, we found that only 760 of these licenses 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.
But 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.
Technology prices are creeping higher for everyone. Today, it’s G Suite. But tomorrow, it could be 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.
Ready to start controlling your enterprise SaaS?
Cleanshelf is the leading enterprise SaaS management platform focused on tracking, controlling, and benchmarking SaaS applications. Their SOC 2-compliant and AI-powered technology helps companies save up to 30% on their SaaS spending by automatically identifying unmanaged contracts, duplicate licenses, and wasted cloud software subscriptions. Based in San Francisco, Cleanshelf provides an enterprise-grade solution to over a hundred clients, including Hilton, Looker, and CoStar Group.