SaaS Pricing & Negotiation

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Our SaaS Experience

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SaaS Spend

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24.1B

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SaaS Savings

Achieved

7.5B

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SaaS Services

SaaS Pricing Inspection and Analysis

01 SaaS

Contract Risk Assessment

02 SaaS Deal Advisory Services

03 SaaS

Program Management

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As more vendors join the growing list of subscription-based solutions, accurate demand forecasts and favorable contract terms go hand-in-hand in determining value in SaaS deals. Because these enterprise solutions are so difficult to move away from, it’s essential to get the forecast and agreement language right at the outset of the engagement. We discuss the elements that go into a creating a conservative demand model, and terms and conditions that guard against long term financial risk.

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SaaS Buying Trends: The Evolving Model

The Cloud Challenge

The benefits of SaaS are real, but they are diminished by contractual lock-in. SaaS vendors today use agreement language to limit customer flexibility and guarantee future revenue increases. As a result, many customers find themselves entrenched with their SaaS vendors as they gain a reliance on their hosted solution.

Unlike software sales based on perpetual licenses for on-premise data centers, SaaS sales call for long-term commitments, recurring costs, and hosted solutions. It’s likely that you will encounter a SaaS engagement in the near future, either being pushed by your organization’s business units or by incentivized sales reps pressuring a shift to the cloud to capitalize on SaaS compensation bonuses.

The Truth About SaaS Pricing

The restrictions inherent in term-based agreements and the lock-in that comes from an organizational commitment to a vendor’s platform leave buyers with little leverage. The result: vendor sales teams dictate the demand model, pricing, and all contract terms and conditions. In other words, the seller controls all the negotiation power, while the buyer holds all the cost and risk.

The good news: SaaS quotes are not set in stone. You can negotiate SaaS pricing and contract terms to make them lean in your favor. There are nine key elements deal leaders need to gain proficiency in to drive deal success. These nine areas are emphasized in ClearEdge's negotiation framework, the Leverage Management Maturity Model (LM3):

Early Warning System

Risk Assessment & Inspection

Forecast & Modeling

Deal Timeline Development

Supplier Knowledge

Deal Option Development

Information Control

Executive Engagement

Messaging Development

Do we have an organized approach to starting deals on time?

Do we understand all SaaS contract and business risks?

How much SaaS product do we need, and when do we need it?

Have we documented a calendar of SaaS deal-making activities?

How might SaaS pricing strategy and motivations affect my deal?

What SaaS deal alternatives or "Plan Bs" do we have?

What information will we protect, and what will we share?

Are executives informed, aligned and participating on the deal?

Are we controlling the story with credible and consistent messages?

Mitigate Risk & Reduce SaaS Cost

When hampered by limited resources and a lack of time to plan, companies can fail to carry out effective buying campaigns against SaaS. ClearEdge offers clients direct, hands-on leadership throughout their deal cycle to build leverage, achieve organization alignment, and control SaaS cost in all major IT categories.

Our SaaS services augment client IT procurement organizations and help professionals create stronger, more productive SaaS relationships. Transaction services have the option to provide direction in deal set-up, team alignment, communication, and strategy, supported by real-time market intelligence and deal analysis.

SaaS Cost Approach

ClearEdge’s SaaS services are designed to be light touch and high impact. Instead of disrupting your team, we will augment it, providing the acumen, data, and advice needed to execute your most strategic IT engagements.