11 min read
Oct 17, 2017

Cost Optimization Guide: Understanding Collaboration Software Pricing

Thinking about trying collaboration software? Read our guide first to optimize costs and get the most value for your money.

Ankita SinghAnalyst

If you're looking for a way to get everyone on the same page and work together in a more productive and efficient manner, you may be considering some type of collaboration software tool. As you know, email and shared documents work up to a certain point, but this is not a sustainable or scalable way to collaborate effectively.

Marketing agencies and creative teams have long understood the benefits of dedicated collaboration tools. But, many other types of businesses can benefit from having a centralized place to share ideas in real time, store assets and resources, provide feedback, and communicate across departments.

However, you may be concerned about the cost of introducing another software tool into your existing processes.

To help, we're breaking down how pricing for collaboration software typically works, and what you should expect to get for your money. Then, we'll give you some cost-saving tips to keep in mind when buying collaboration software.

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What is collaboration software?

Collaboration software is categorized as social software for the workplace by Gartner, as the collaboration software market "includes software products that support people working together in teams, communities or networks."

Gartner goes on to point out that collaboration software can be adapted for use across business verticals.

The offerings may vary from platform to platform, but in general, collaboration software includes:

  • Team communication features, such as chat and discussion threads, that allow users to connect, share ideas, and provide feedback

  • A centralized place for sharing and storing files, resources, and assets

  • Task scheduling, assigning, and tracking capabilities

Collaboration software has a range of uses, from coordination within small project teams to collaboration across an organization.

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Collaboration software pricing made simple

There are a variety of collaboration software tools available, but most offer pricing tiers that vary based on the number of users, as well as the features and functionalities offered.

We compared 15 popular collaboration software platforms based on user ratings. To help you understand pricing for these products, we've classified the pricing models into three main categories: Starter, Mid Range, and Enterprise pricing. (Price ranges here represent the mean values of the prices. See the bottom of the article for the full methodology.)

An analysis of the software products considered here and the features they offer gives us insights about the number of users each price range is most likely to support, as shown in the pricing meter below:

The meter is intended to provide a rough estimate of how much you'll likely spend on collaboration software for your business, based on the size of your team. Keep reading to learn about how your features requirements will affect how much you'll spend.

Note: Prices are on a per user per month basis. Price plan terminology used by different software vendors vary and may not exactly match with the terminology used here. The three price categories here provide a general estimate of the price ranges and target user base supported by different vendors. See the appendix to learn more about the methodology we have used to arrive at the three price categories.

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Putting a price on collaboration software features

In the table below, we've identified the level of features that are most likely to be available within each of the collaboration software price ranges.

For example, most of the options priced below $15 per user per month offer file sharing and mobile device management, while reporting and auditing features and advanced level security would likely require you to invest in mid-range and enterprise versions, and discussion boards are most likely only included in the enterprise versions.

Note: The above results are not for any specific software product but are derived through an analysis of the features offered by the 15 software platforms considered. For example, the green box with a checkmark represents the presence of a feature in a particular price range for 50 percent or more of the products.

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Customer service and support considerations

Questions and technical glitches often arise as you implement new software, but also as you continue to use it. To address customer issues and pain points, software vendors offer customer support through a variety of channels, including community forums, knowledge bases, training sessions, phone, email, and live chat.

The level of customer support offered by collaboration software vendors at each price point can be summarized as follows:

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Other tips for collaboration software cost optimization

Here are some ways you can further reduce your costs when purchasing collaboration software:

Monthly vs. annual billing cycle: How often you pay can impact the price of a new software system. Several collaboration platforms offer savings per user per month if you opt to pay for the full year at once. However, you should take advantage of a free trial, if possible, before entering into a year-long agreement to save money. That way, you'll have a better understanding of whether or not the tool is right for your business before you commit.

Free trials and "freemium" plans: You can also save money by trying the freemium version, which is a free version of a paid software platform that typically offers limited features or a limited number of users (freemium versions are offered by collaboration platforms such as Samepage, Zoho Docs, Asana, and Slack).

Many vendors (including Zoho Docs, Box, and Dropbox) also offer free trials, which can help you gauge which features you need for your team through hands-on experience.

Integrations: In some cases, you can save money by opting for software that integrates with the software tools you're already using. For instance, Dropbox integrates with project management apps such as Slack, Trello, and Asana. This can make implementation easier, and it also lets you maximize your software without requiring costly customizations.

Scalability: Features such as unlimited storage space and advanced security options come with more expensive versions of many collaboration platforms. You may not need those yet, but you may want them down the line. Understanding both your current and future requirements will help you choose a platform that will grow with you, but allows you to avoid paying for more than what you need right now.

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Next steps

  • Visit our collaboration software comparison page to see a comparison of collaboration apps on the basis of features, pricing, integrations, and more. Add or remove apps to see your shortlist compared side-by-side.

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Appendix: Price range meter methodology

Starter price range

The starting price of most of the products is $0, and this forms the lowest value of the range. The higher end of the starter price range is calculated by taking the average of the lowest prices of the top 15 products. This ensures that the starting price of most of the products fall within this range. Similarly, the number of users supported by a product in this price range is the mean of the number of users supported by the starter versions of the top 15 vendors.

Example: If the lowest pricing plans (not including free versions) offered by vendors A, B, and C are $10, $5, and $15, respectively, then the higher end of the starter price range would be $10 (average of all the prices).

Mid price range

The lower end of the mid price range segment is the highest end of the starter price range. To get the highest end of the mid price range segment, we took an average of the middle prices of the top 15 products. In cases where there were multiple pricing plans between the starter and enterprise versions, we have taken the average of those plans to identify the product's middle price value.

The number of users supported by software in this price range is the mean of the number of users supported by the mid price versions of the top 15 vendors.

Example: Suppose product A has four pricing plans: Basic, Professional, Business, and Enterprise at $10, $20, $40, and $60, respectively. Then the mid price value for product A is the average of its Professional ($20) and Business ($40) plans, i.e., $30. If the mid price of other two vendors B and C are $20 and $40, then the higher end of the mid range price segment is the mean of $30, $20, and $40 ($30).

Enterprise price range

The enterprise pricing segment starts from the higher end of the mid range pricing segment. All prices above this value lie in the enterprise pricing range.

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