Salesforce is raising prices across its clouds starting in August.
In a blog post, Salesforce said it will be increasing list prices about an average of 9% across Sales Cloud, Service Cloud, Marketing Cloud, its industry clouds and Tableau.
The news was good for Salesforce shares as the company has cut costs, kept customers and is now raising prices.
Salesforce noted that the company's last list price increase was 7 years ago. The primary argument for the price increase is that Salesforce has been rolling out new innovations around generative AI. Recent headlines include the launch of AI Cloud, Einstein GPT, Sales and Service GPT as well as other updates.
- Salesforce rolls out Sales GPT, Service GPT
- What Movies Get Wrong…and Salesforce Gets Right…About AI
- Salesforce launches AI Cloud, aims to be abstraction layer between corporate data, generative AI models
- Salesforce launches Marketing GPT, Commerce GPT, aims to connect generative AI to ROI
- Salesforce Q1 better than expected, margins improve
According to Salesforce, Professional Edition list prices will increase $5 to $80, Enterprise Edition will jump $15 to $165 and Unlimited Edition will go for $330, up $30. Similar increases will be implemented across Industries, Marketing Cloud Engagement and Account Engagement, CRM Analytics and Tableau.
Constellation Research CEO Ray Wang said:
"SaaS pricing was supposed to get cheaper with time and Salesforce was the standard bearer.
Unfortunately customers now pay for licenses before implementation, they over buy licenses and can’t reduce them, and now they are subject to vendor lock-in and price increases despite record profits by the cloud providers.
Customers should ban together and reject these price increases before it's too late.
Salesforce had amazing profits and customers entrusted Salesforce to achieve economies of scale and past cost savings to the customer not hold them in vendor lock-in."
While many enterprises have multi-year contracts and discounts across multiple clouds, Salesforce's increases will add up when it's time to renew.
Salesforce has said that 20% of its customers have more than 4 clouds.
