SMEs could save 10 billion euros yearly

European small and medium-sized enterprises (SMEs) may save up to 10 billion euros annually on software purchases by negotiating better deals and eliminating duplicate tools, according to a recent analysis by Spendesk. This estimate is based on data from 2568 active companies across Europe, with the majority located in France, followed by Germany and the United Kingdom.

Most SMEs have fewer than 250 employees

The analysis shows that 91% of the companies studied have fewer than 250 employees, reflecting the typical structure of SMEs in Europe. These businesses represent a significant portion of the European economy and often rely heavily on software tools to operate efficiently.

Price variation leads to large overpayments

Spendesk used Eurostat data to extrapolate its findings to the entire EU. It found that in the category of companies with 50 to 250 employees, price variation alone results in 7 billion euros of overpayment annually. This is based on an analysis of spending on 12 SaaS (Software as a Service) products with per-seat licenses.

Some companies pay up to 9 times more

The analysis compared what companies paid per employee for the same software, using the lowest-spending 25% as a benchmark. The results showed that companies could be paying significantly more than the most cost-effective buyers. For example, some paid up to 9 times more for Notion and 8.3 times more for Atlassian compared to the lowest spenders.

Duplicate software costs billions

Eliminating duplicate software use among the sample companies could save 15 million euros annually. When scaled up to all EU companies with 50 to 250 employees, this could result in 3 billion euros in savings. AI and design software account for the majority of this potential savings, with many buyers using at least two competing products.

Duplicate software use is on the rise

Spendesk found that 65% of the companies analyzed use at least two competing software models, up from 29% the previous year. The variation in pricing for AI services is particularly high, with a median monthly difference of 61% across the sample. This variation is slightly higher in France than in the UK or Germany.