I have seen wide variations in SaaS contract pricing (30% to 40%) from customers with similar user subscription numbers, application needs and term lengths. There is always the potential to have SaaS price variances based on geographic location, SaaS vendor account executive selling skills or contract timing in a vendor’s fiscal year. However, there are more-critical factors beyond these that can dramatically affect subscription pricing.
Some of the key factors contributing to these expensive SaaS contracts are companies needlessly signing vendor price confidentiality agreements limiting their negotiation power, beginning contract renewal talks a month before the contract termination date, or negotiating large ELAs with no hope of ever reaching the subscribers numbers to make the deal cost worthy.
A newly Gartner published research note entitled: How to Avoid Expensive SaaS Contracts – R.DeSisto, provides 6 best practices to reduce SaaS contract expenses. If you are in the process of signing a new contract or renewing existing one it is a must read.
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