Why Vendor Consolidation Is Such a Big Force in Customer Success Right Now—and What You Can Do About It Image

Why Vendor Consolidation Is Such a Big Force in Customer Success Right Now—and What You Can Do About It

Nick Mehta, CEO, Gainsight, recently had a chance to sit down with Ryan Neu, CEO, Vendr, and Chris Collins, CCO, Tricentis, to discuss one of the most pressing topics in SaaS: vendor consolidation. They explored the challenges and opportunities for software companies as organizations look to reduce IT spend and simplify vendor management. 

As 0% interest rates recede into the past, procurement departments are becoming much choosier about how they spend their money and vendor consolidation is emerging as the number-one strategy to reduce spending.


But as Collins says, vendor consolidation is about more than just cost-cutting: “There was a lot of software sprawl during the boom. It’s not necessarily about saving money, it’s about simplicity and efficiency, and not having to integrate multiple systems that weren’t built to talk to each other.” 

Neu of SaaS buying and management platform Vendr, led a discussion around four major trends in vendor consolidation.

Major Trends in Vendor Consolidation

1. Platform Solutions Are Taking the Lead 

Companies are showing a strong preference for platform plays over point solutions. As software providers expand into adjacent categories beyond their core use case, competitive selling will ramp up. As Mehta put it: “If you’re a platform provider, get ready for the opportunity. If you’re a point solution provider, get ready to defend your turf.”

2. Scrutiny Is Increasing for Every Purchase 

According to Vendr data, software buying cycles have increased 40% since 2020 as customers introduce new financial decision makers and require more competitive evaluations. In response, software companies need to get proactive about renewals, doing their homework and initiating early. 

3. Average Contract Value (ACV) Is up for Negotiation 

In a choppy macro environment, nothing is certain, and vendors may get an unpleasant surprise at renewal when a customer asks for an RFP. Smart companies are locking in multi-year deals and offering financial incentives that provide certainty and stability for all parties. 

4. The Stickiest Products Have the Leverage 

There is a pecking order in SaaS, with the top 10 companies holding more than 30% of the average budget at any given company. Vendors like AWS and LinkedIn offer must-have products and may even be able to raise prices, while nice-to-have products will likely get left behind.

Mehta then led a conversation around how to digest these trends and use them to your advantage.

How to Win in the Age of Vendor Consolidation 

Build Trust With Leadership

Thought leadership discussions will build strategic trust, making your business a key partner beyond tactical considerations around product functionality.

Make Procurement Easy

Reduce internal effort for your customers with a single contract, common security docs, and a transparent, standardized purchasing process.

Streamline Pricing

Gain financial leverage with easy-to-understand pricing models that use smart bundling and easy add-ons.

Focus on the Value Proposition

Thorough integration of all the products within your platform you will deliver maximum value and outcome achievement for your customer.

Simplify Vendor Management

Reduce the number of touch points that customers need to manage your product by consolidating the number of CSMs and QBRs.

Deliver Time to Value

The advantage of working with an existing vendor is that value should be easier to achieve—make sure you deliver on that. 

Learn More 

These are just the highlights! To get the full story, watch the webinar: Why Vendor Consolidation Is One of the Biggest Forces in Customer Success Right Now.