Most companies put a lot of thought into their initial SaaS subscription purchases. Large enterprise organizations in particular often spend years considering their options – comparing pricing and features, scheduling demonstrations of competing services, and presenting the possibilities to leadership teams across the organization. This level of effort and care makes sense – SaaS subscription contracts are large budget items that can drastically change the way your enterprise functions.

 

Why, then, do organizations let these same contracts auto-renew without making sure they’re still the best fit? Even when an organization is prepared for a software renewal, it rarely puts the same level of effort into evaluating the contract again. That’s a mistake. Just because the contract budget is already allocated doesn’t mean it’s being spent wisely. Take advantage of your contract renewals and make sure your SaaS subscriptions are still working for you. Here are five things to think about before renewing a contract:

 

1.  Figure out where the service fits.

Don’t look at SaaS in a silo. When it comes times to renew one SaaS service, look at all the rest of your subscriptions, too. There’s a chance you’re paying for two services that offer the same functionality, and these applicational overlaps will cost your organization. When you pay for two services that do the same job, you’re not only wasting money, but you’re encouraging your employees to pick and choose where they do their work. If you focused on one platform, you could save money and promote cohesive processes within the organization.

 

2. Review your usage history.

Do you have a clear view of your usage history over the past year? Weighing what you’ve used in the past against your goals for the future will help you determine whether your subscriptions are scaled correctly, so you pay only for what you need. In consumption-based licenses, higher usage commitments can reduce your overall costs. In user-based contracts, cross-checking the number of purchased licenses versus the number of active users will eliminate shadow IT costs. Unfortunately, your employees probably don’t know exactly how much they used the service over the past year. Investing in subscription management software is the best way to efficiently view your true past usage and estimate what you’ll need going forward.

 

3. Know the current pricing plan.

SaaS companies are notorious for changing their pricing plans – sometimes without directly notifying their customers. Before you blindly sign a contract renewal, look for any publicly-available details about their most current pricing plans. Knowing whether the cost has increased or if they’re offering a deal for new customers will put you in a position to negotiate. As a long-term customer, you may have leverage to keep a lower-cost pricing plan even if fees have increased. Occasionally, features that used to be standard have become add-ons, which can also increase your cost. Don’t be afraid to ask for these features to be grandfathered into your renewed contract instead of paying more.

 

4. Consider how you pay.

The longer contract you commit to, the less you will pay. If you are willing to commit to an annual plan versus a monthly plan, for example, you will generally end up paying less per month. If you can pre-pay for that annual or multi-year contract, you’ll likely reduce costs even further.

 

5. Compare notes and shop around. 

Technology changes quickly – and so do technology companies. Before renewing a contract, talk with your SaaS vendor’s competitors. Find out if they can provide the features and functionality you need at a lower cost, or in a usage model that makes more sense for your organization. Look for new products and services that may have come to market since your purchase or last renewal. Consider any newer, more comprehensive SaaS services that might be a better, but consider the cost and complexity to switch, migrate your data, and train your team as well. Then, find out what other companies are paying your SaaS vendor to make sure your contract is competitively priced. If another organization is getting a better deal for a similar contract, re-negotiate for the same rate.

 

Ready to take the risk out of your renewals? Subscription management software gives you the information you need to find the best-fit SaaS services, optimize your usage, and make sure you can find the silver lining in your cloud services.

 

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