9 Key Points to Negotiate in a SaaS Agreement

So you’ve decided to go with Software-as-a-Service (SaaS). It’s easy to implement, easy to use and has a friendly subscription pricing model. You’re psyched.

Then comes the contract.

While SaaS has simplified enterprise software in many ways, you will still need to review, negotiate and execute a fairly complex contract when subscribing to an “enterprise-class” system. In this post, we will walk you through the nine most important things to consider when negotiating your SaaS agreement.

1. Pricing and Discounts
By pricing software as a utility service, SaaS vendors have simplified software licensing considerably. Most SaaS pricing is based on a subscription – monthly or annual payments for using the system during that period. The subscription pricing is typically based on one simple metric (e.g. users, records, projects) that roughly ties subscription fees to the value of the system. Finally, SaaS vendors tend to publish their pricing openly.

Even with this simplicity and transparency, there is still a need to be vigilant as a buyer. For one, don’t assume that straightforward published pricing means there isn’t room for some negotiation. Many SaaS vendors will discount up to 20% to win your business. The bigger the deal, the bigger the discount. Moreover, if the vendor’s pricing metric doesn’t fit with your business model, you might be able to negotiate custom pricing. Of course, you’ll have to make a cogent argument that the standard metric fails to balance price paid and value received.

To Continue Reading Visit, ERP Software Advice at 9 Key Points to Negotiate in a SaaS Agreement
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By: Derek Singleton