Q3 Purchasing Trends drop! Big gains in adoption from some of the likely suspects, while some of the drop offs are a bit more surprising.
Q3 is often seen as a "sleepy" quarter - July and August are slow moving as summer vacations run rampant and contract volumes are historically lower than the rest of the year. In 2023, Q3 total contract volume was 10% lower than Q2, and a staggering 33% lower than Q4.
2024 is no exception, with a 25% dip in Q3 contract activity compared to Q2.
What does this mean? Cyclical slowdowns are the norm in Q3, but if you didn’t use that time to prepare for a wild Q4, you’re already behind.
Now, check out some of the fascinating supplier trends developing:
Mid-market adoption ⬆
These are the suppliers that had the largest absolute increase in organizations across the Tropic network:
1. OpenAI
2. WebFlow
3. Heroku
4. Databricks
5. NinjaOne
No surprise on the leader here, companies are going all-in, converting ChatGPT trials into full deployments of AI solutions. The rise of modern web development tools is also undeniable and has seen growth over a number of quarters —mid-market organizations are rebuilding digital experiences fast with Webflow and Heroku. This is coming at the expense of WP Engine, which we see on the top of the decline board below.
Mid-market adoption ⬇
These are the suppliers that had the largest absolute decrease in organizations across the Tropic network:
1. HubSpot
2. Browserstack
3. 15Five
4. WP Engine
5. Crossbeam
Hubspot being at the top of the list is fascinating. There’s been a lot of noise about Hubspot moving upmarket, competing with Salesforce and expanding beyond its historical SMB dominance. The trends we’re seeing here would suggest the opposite. We’ll be closely watching to see how this unfolds.
SMB adoption ⬆
1. Github
2. Atlassian
3. Expensify
4. Loom
5. Cypress.io
In the SMB space, GitHub and Atlassian remain essential pillars. GitHub's dominance continues, bolstered by efficiency-boosting tools like Copilot. Meanwhile, Atlassian remains a go-to for small businesses, streamlining processes and information management across teams. Loom, now owned by Atlassian, further validates this hypothesis!
SMB adoption ⬇
1. ZoomInfo
2. LinkedIn Recruiter
3. Lattice
4. LastPass
5. Avalara
SMBs are clearly re-thinking the necessary tools in their stack. ZoomInfo and LinkedIn Recruiter, once essential tools for all businesses, are now getting met with churn as customers look for cheaper, more nimble alternatives. I’m not counting either of these companies out, but there’s definitely a shift in strategy in how they’re targeting SMBs.
What’s next? We’re nearly done with the first month of Q4 - and all signs point to a Q4 resurgence as companies ramp up for year-end, with plenty of opportunities for renewed supplier engagement and contract negotiations.
How has Q4 kicked off for everyone else?