Gartner Blog Network

When, and When Not, to Pay the Premium

by Robert Desisto  |  February 21, 2014  |  1 Comment

One of the top questions Gartner receives from clients evaluating is, why are services so expensive versus the competition? With the recent introduction of’s Performance Edition (see “ Announces New Comprehensive CRM Edition”), customers who would have purchased Unlimited Edition (no longer available) are paying 25% to 35% higher prices than they would have with Performance Edition. does offer more functionality in Performance Edition, but not all customers need those capabilities.

Gartner has seen customer evaluations that indicate that can be as much as three times the subscription price versus that of the competition. In some cases, customers assume that if is that much more expensive it must be better. Gartner suggests that customers avoid equating price with value, a trait inherited from consumer buying habits. Functional differences between editions may be minor for particular customer solutions; has continued to hold their premium, particularly for larger enterprises. Over the course of hundreds of evaluations, we asked clients why they would pay such a premium for, and we have come up with five basic conclusions that we will explore in a just published research note (see When, and When Not, to Pay the Premium). It was clear the customers who did not choose did not place enough importance on these reasons to justify’s price premium. This is research is a must read if your in the vendor selection or contract procurement process with

Category: crm  salesforce-automation  salesforce-com  

Tags: crm  saas-cloud-computing  salesforce-com  

Robert P. Desisto
VP Distinguished Analyst
14 years at Gartner
24 years IT industry

Robert Desisto is a Vice President and Distinguished Analyst in Gartner Research. He is responsible for managing the software as a service (SaaS) research agenda. His research focuses primarily on the use of SaaS as a delivery model for applications. Read Full Bio

Thoughts on When, and When Not, to Pay the Premium

Comments are closed

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.