Avoiding "Shady" IT Vendors: Doing Cloud-based Software Deals with Confidence
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The document discusses strategies for negotiating software deals in the cloud, highlighting key risks such as opaque pricing and potential agreement pitfalls. It outlines important negotiation components including pricing structures, true-up orders, and legal terms. The document emphasizes the need for clear terms, pricing flexibility, and better understanding of subscription dynamics in cloud agreements.
Avoiding "Shady" IT Vendors: Doing Cloud-based Software Deals with Confidence
- 1. Negotiating Software Deals in the Cloud Creating Value Where it’s Needed Most www.ITnegotiations.com
- 2. Every Vendor’s Strategic Direction is Cloud: 2
- 3. Where are the Risks? • Opaque / Bundled Pricing • Over-buying Shelfware • Eroding Discounts Over Time • Agreement Traps and Pitfalls • Growth, True-ups & Renewals • Unfamiliar Territory Disadvantage 3
- 5. Price-Points & Issues to be Negotiated: • Pricing • Future Price Protection • Systems Implementation Charges • Term of the Agreement • Ancillary Charges (Storage & Transactions) • The Legal Terms (SLAs & SOWs) 5
- 6. Pricing: Subscription A Pricing: List Price ($) Discount (%) Net Price ($) Volume Clip Levels: (Adjust as needed) 50 to 100 $250.00 50% $125.00 101 to 200 $250.00 60% $100.00 201 to 300 $250.00 75% $62.50 etc. (add lines as needed) Subscription B Pricing: Volume Clip Levels: (Adjust as needed) 500 to 1000 $100.00 50% $50.00 1001 to 2000 $100.00 60% $40.00 2001 to 3000 $100.00 75% $25.00 etc. (add lines as needed) 6
- 7. True-Up Changes: What to Count: Previous Terms: New Terms: Enrolled Affiliate must submit an annual true-up order that accounts for changes since the initial order or last true-up order, including (i) any increase in licenses, including any increase in Qualified Devices or Qualified Users and Reserved Licenses; (ii) Transitions (if permitted); or (iii) Subscription License quantity reductions (if permitted). Enrolled Affiliate must submit an annual true-up order that accounts for any changes since the initial order or last order. Including: Enterprise Products… Additional Products… Online Services… Transitions… Subscription License quantity reductions… 7
- 8. Q & A ? www.ITnegotiations.com 8
- 9. True-Up Changes: How Much to Count: Previous Terms: New Terms: Additional Products: For Products that have been previously ordered. Enrolled Affiliate must determine the Additional Products used and order the License difference (if any). For Additional Products that have been previously ordered under this Enrollment, Enrolled Affiliate must determine the maximum number of Additional Products used since the latter of the initial order, the last true-up order or the prior anniversary date and submit a true-up order that accounts for any increase. 9