As software as a service (SaaS) has gained widespread market adoption, many initial deals are expiring and customers are facing renewal negotiations. But unlike other information technology deals, your negotiation leverage is much more compromised with SaaS renewals since you do not own the application licenses. Consider the following:
- Do you have renewal price protections in place or is pricing wide open for negotiations?
- Have you identified SaaS or on-premises migration options?
- Is there enough time to negotiate and implement an alternative solution?
- Is there a compelling enough business case to support the cost, time, and business disruption of migrating to another solution?
- What will happen to your business if you are unable to reach agreement or choose not to renew?
Many renewal negotiations not only fail to achieve cost reduction goals but take a tremendous toll on the negotiation team and the vendor relationship. Practically every failed negotiation occurs not because of a lack of negotiation skills, but because organizations were not properly prepared.
Read More from This Article: 6 steps to successful SaaS renewal negotiations