Category: Negotiation Series

Soft Savings vs. Hard Savings in Software Asset Management

Savings are what makes the software asset management world go ‘round; it’s what all the SAM tool vendors preach and it’s one of the main reasons people get into software asset management in the first place. Knowing the difference between hard savings vs. soft savings is an important component to getting the most value for your software dollar.

However, what exactly are you signing up for when you sign a deal with a SAM tool vendor, who is promising ‘savings’ in a high theory sense? What does ‘30% annual savings’ (or whatever your SAM tool vendor promises you) actually look like?

What are the types of savings that you actually see when you successfully implement software asset management?

At MetrixData 360, we are all about transparency and working with our customers to achieve strong tangible results. Here, we’ll look at what type of results you can expect from signing a deal with a SAM tool vendor and exactly what you can expect to save after a SAM implementation by diving into both hard and soft savings.

Hard and Soft Savings Defined

Hard Savings are easily tangible benefits to your bottom line; increased revenue streams and reduced costs. Soft Savings are indirect savings where the company reduces risk and exposure to compliance and legal costs. Watch our video below to see the best hard and soft savings areas we’ve discovered in our client’s IT environments.

See the 12 Best Hards and Soft Savings Areas You Can Target to Save Money In Your Organization.

Download our Hard and Soft Savings PDF for Free:

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Hard Savings in Software Asset Management

Hard Savings are an inflow of cash that has a direct relationship to the bottom-line profits or losses. These are things like revenue enhancement (increasing the price of your product) or cost reduction (finding cheaper materials for your product or finding a way to manufacture your product faster).

Some examples of hard savings in SAM include:

Streamlining the Efforts of the IT Department

There are elements of software asset management that can help every area of the IT department, including:

Having an organized software environment means that there is less to manage, less to go searching for, fewer blind spots and less shadow IT that your IT department will constantly be compensating for.

No one is left scrambling to do a year’s job in a matter of months in the event of an audit or true-up. Best of all, IT is given the data they need to advocate for new software or for the replacement of old software.

Related: Want to know how Software Asset Management can create value for the rest of your company? Check out these articles: Partnering CFO and CIO: How to Use Tech to Save Money and How SAM Can Improve Your Cyber Security,

The Real Source of Hard Savings in Software Asset Management

The one area where software asset management can yield real results is in the fact that SAM equips you with the data you need to hand tailor your software contracts to match the specific needs of your software environment.

Without SAM, companies will be forced to guess how many licenses they need to purchase — guessing too high is a waste of money and guessing too low will leave you exposed to the heavy fines of an audit, both scenarios amounting to lost money.

Knowing exactly what you need takes the power out of the software vendor’s hands and levels the playing field, since not having SAM leaves you buying simply what your sales rep has told you to buy. As charming as a sales rep might be, they sit in a position that is adversarial to yours.

They want you to simply buy more while your goals are to buy only what you need to. You need to have your own knowledge to back up your purchases.

Soft Savings in Software Asset Management

Soft Savings are savings found through adding to the bottom-line profits or losses, these are usually intangible and difficult to measure. These are things like improving safety in your workplace to avoid accidents and to conform to new laws as they are passed, since failing to adhere to both can lead to heavy lawsuits.

Increasing employee satisfaction is another type of soft savings since this will lead to fewer people quitting and less time spent hiring and training a constant stream of replacements.

Software Asset Management is rich in soft savings, which is often why it is overlooked by many organizations since soft savings are more difficult to measure. That doesn’t take away from its value, especially when considering the following areas:

Track Arrivals, Movers, and Leavers for Soft Savings

Large organizations are composed of thousands of employees, new hires coming in, long-term employees retiring, or employees getting shuffled around from one department to another.

This constant state of motion must beg the question: what happens to the software of those employees? How can a company hope to keep track and make use of the software licenses that these shuffling employees need without SAM?

It is important to have a process for the purchasing of new software and its retirement, to avoid the repurchasing of licenses and the accumulation of ‘shelfware’ – software that you aren’t using but still paying for.

Software asset management is an excellent way of keeping track of…well, software assets. Although it is important to understand that many Software Asset Management companies with discovery tools to sell will often promise high percentages of saving continuously over several years. They promise this using their discovery tool to find unused licenses and putting them back into your software environment. This can be a way to cut costs if you were already planning on buying more licenses or your contract renewal is approaching, and you plan on cutting those unused licenses out of your contract.

But discovery tools alone will not provide you these types of results, not without software licensing metering (which must already exist in your software environment) to be paired with the discovery tool. You will also need the knowledge to understand the data that the discovery tool will provide you.

However, without the other two elements to this recipe — and paired with the right circumstances — it is unlikely you’ll see such tangible results through the implementation of a single software tool.

A single SAM tool typically only increases visibility into your software environment by 10%, which makes sense when you consider the fact that most SAM tools only give you visibility into a single product or vendor, of which your organization may very easily have dozens.

This is why MetrixData 360 takes the unique approach of creating a holistic view of your data, examining every product throughout your software environment and providing you with our expert’s insights in how to read the data you have been given.

Soft Savings by Avoiding Auditing Penalties

Our clients have come to us in the midst of disaster-level software audits. We’re talking millions of dollars in audit penalties being paid out that they didn’t actually owe. This is because they didn’t have a proper SAM process in place. They didn’t know how to respond to the auditor’s claims because they didn’t have visibility into their software environment.

While having software asset management during an audit in and of itself will not make you money, it could certainly keep you from losing money unnecessarily. Imagine if you could find problems before they incite an audit and you get to avoid the unpleasant process altogether. Going through a software audit successfully is also a great way to demonstrate organization and control to the software vendor, making them less likely to audit you again in the near future (it’s not a magic bullet for software audits but it does help).

Software Asset Management will also cut down on a silent expense of software audits that many companies are not actually aware of until they are in the middle of a software audit: wasted time and resources. Software audits can cut away thousands of working hours from your company so that your employees spend their days chasing down sometimes pointless data requests from the auditor, instead of doing their jobs.

This can prove to be a massive expense that can easily be avoided with the right software asset management strategy on your side.

Get Finding Hard and Soft Savings with SAM

Software Asset Management can help identify hard savings vs. soft savings. That statement might be true, but it can also prove a bit simplistic. Before you get on board the SAM bandwagon, you’ll want to know where it’s going. After all, there is no point signing up for something that will be just another software expense to keep track of.

At MetrixData 360, our whole process is built around saving you money, from the tools we design, to the consulting services we offer, our goal remains aligned with your interests.

If you would like to know how you can get started with software asset management today, you can contact us using the button below and we can get started!

Not many people enjoy software contract negotiations. This is because not many people think that they are good at it. There’s an anxiety that you’ll run up against a smooth-talking salesman who will spin circles around you until you’re signing your life away on the dotted line. This fear is only exacerbated when we consider the hyper complexity of software licensing that makes it difficult to understand on the best of days. Software negotiations may not be an exact science, but they are not derived solely from born talent either — you can learn to be good at it.

At MetrixData 360, we have spent 20 years going through software contracts, and as a result, we have successfully negotiated over a billion dollars in software contracts for our clients. In this booklet, we will go over how best to get ready for your negotiation with your software vendor, whether that negotiation is a contract renewal, the arranging of a new contract, or looking for a concession at the end of a software audit.

Table of Contents

Understanding the Vendor

It may be unfair to paint the vendors as the villains of this scenario, but while they don’t have forked tongues and horns coming out of their foreheads, it is important to remember that they and you sit in adversarial roles with opposing goals in this arrangement. They want sales, maximum profit, and a push to popularize certain platforms (Microsoft has been aggressively pushing Azure as a good example of this tactic). You, on the other hand, want software that will only bring value to your company, and you want to pay a fair price for only the features you need. By their very nature, these goals will butt heads and therefore you must keep in mind that for this moment, the vendor is your opponent, no matter how much your sales rep will act like they want to be your friend or business partner. To start this battle, it is important to get to know your opponent first. So, what advantages will your software vendor’s sales rep have when they come to the negotiations?

Inventory and License Knowledge

Usually when vendors first hire new sales reps, they will have them go through extensive training that forces the new hires to learn the ins and outs of all the vendor’s products and the licenses to go with them. They will most likely have a strong understanding of contract templates and will be trained on customer relationship management. A seasoned sales rep spends their days going over these same products again and again, however, their knowledge of software licenses only really covers how to effectively sell the software to you. In addition to this, the software that they are pushing on you might have very little to do with your goals for cost-saving or value, it’s simply what they were told to sell. Often, we have seen software sales reps, when pressured, produce more cost-effective deals that fit our client’s needs far better. So, whatever you do, do not let the mind-set sink in that the sales rep knows what is best for you, only you can answer that question.

Trained Responses to Suit Their Goals

Any objection you could possibly think of to why you shouldn’t buy a product, there’s a guarantee that your sales rep has heard it before, and they already have a perfectly timed answer ready. It’s important that you let go of the idea that both of you can come to a win-win scenario. That’s not how the sales reps will be thinking, at least, because sadly we live in a world where behavior is controlled by business objectives and annual reviews. This means that no matter how much they might like you as a person, the software vendors are always going to work solely with their own victory in mind, so you will need to take the same approach.

Cultivated relationships

The software vendor will work hard to cultivate relationships with the C-level employees of your company; doing research to figure out where the upper levels of your management went to school, past employment, favorite charities or civil organizations, searching for any and every connection. If you aren’t on “golfing buddy” terms with your CEO and you need to walk into a software negotiation with people who are, it could leave you at a disadvantage. If you aren’t necessarily the be-all-end-all decision maker of your company, then that means the software vendor will be especially rigid towards you, because whatever progress you make with the software vendor, the sales reps will have to go through the same process again with the people above you in your company, only this time the starting price will be whatever progress you made.

Time

Software vendors will often pressure you to wrap up the deal quickly. The truth is that the software vendor has the advantage of time on their side. The situation is exacerbated if the software the vendor is selling is critical to run your business because there’s only so long you can wait before not having that technology impairs your business’s productivity. In many cases, if the vendor doesn’t like what you’re proposing, they can simply fold their hands and wait in order to outlast you.

Of course, you will be able to tell if you have a good vendor on your hands if they don’t resort to any of these ploys: if they don’t take their merry sweet time about closing a deal; if they don’t leap-frog over you to get cuddly with the C-levels; and if they offer deals based on your business’s interests and needs, you should reconsider your relationship. If you find a vendor who makes it clear that these underhanded strategies are not how they roll, cherish that relationship.

Tactics at Your Disposal

Despite the seeming unevenness of the situation, there are a few tactics you can use when approaching a software contract negotiation that can ensure the best outcome for the situation.

Focus on What You Need, Not What You Want

We all like shiny new things and getting the latest and greatest software always seems like a tempting offer to give into, but it may not be what your company needs. Even just going for a discount may not serve your company the best in the long run. You need to know exactly what your company needs based on the following factors:

Prepare and Surround Yourself with the Right People

When it comes to software contract negotiations, there’s no such thing as too much information. We have often seen customers rush into a conversation with their suppliers about features and needs before they are completely ready to do so. You need to start preparing for your contract negotiations long before you start arranging a kick-off meeting. Make sure you have a firm understanding of your business’s requirements, the full extent of the features and benefits your desired product offers, and the particular licensing metrics of the software vendor you’re dealing with.

Take the time to prepare a meeting agenda outlining any and all outstanding questions or issues you may have.

As part of your preparation, you should surround yourself with a team of experts. Expertise sits in many different departments, including procurement, IT, and the legal department. Remember, the ones who are arranging the purchase of the product are often not the ones who will be using it. Seek insights from a variety of sources and don’t get caught up in the petty squabbles between departments; despite the fact that many organizations often create internal walls that are difficult to overcome, it’s important that you face the software vendors with a united approach.

Follow Your Own Timeline

The vendor will often press you and make it seem like they need your answer quickly but that hardly means there is anything tangible behind this pressure. It’s not like the vendor’s main office is going to collapse into the sea unless they get your answer; if they can meet with you tomorrow, odds are they will also be available next week or the week after. It’s important that you pick a schedule that works for you, and that you resist the vendor’s pressure whenever possible. Try breaking your contract negotiation into parts, instead of taking an all-or-nothing approach. This strategy will compartmentalize your efforts, which can allow you to track your progress and will give you a feeling of accomplishment rather than slogging through one giant battle.

A negotiation can be broken down into four parts:

Know Your Data

This is the key to developing a strong approach to a software contract negotiation. If you don’t know what you have deployed, if you don’t know what you are using or how much value your company is getting out of it, then you won’t be able to make smart purchasing decisions. We have often seen companies buy simply based on what they have purchased in the past or they make an educated guess at what they need. However, if you purchase based on what you have bought in the past, then it both fails to account for any future growth your company may experience and opens you up to rebuying licenses that you never needed. Guessing will also lead to similar problems since guessing a license number that is too high means you are losing money and guessing too low leaves you exposed to heavy penalties in the event of a software audit.

The best way to gain insight is through effective software asset management procedures. If you want to know how you can get started, you can check out our article, Implementing Software Asset Management for Beginners.

Come to the Negotiating Table with the Right Attitude

While emanating charisma might come easier to some than to others, it is a skill that can be learned given enough practice. Bringing the right disposition to negotiations will allow for the meeting to go smoothly.

Know Your Vendor Better Than They Know You

The software vendors will have to go through a few questions while they are considering their partnership with you. Considering these questions can help you direct the conversation in a way that ensures that they are positively answered in the mind of the vendor:

Your knowledge cannot be limited to what your sales rep likes and dislikes. Many companies are not willing negotiate with anyone within the software vendor’s company other than the sales rep, especially when they have developed a friendly relationship. You don’t want to upset the balance within the software vendor’s company and the software vendors are great at making sure things stay this way. It’s critical that you break out of this cycle in order to get the software contracts that you want. Be willing to escalate the situation up the chain of command if needed. A well-placed phone call to a high-ranking member of the company may be just what you need to get your software negotiations moving again.

Have a List of Talking Points

There’s no hard and fast rule to leading a successful negotiation because contract negotiations are as unique as the software that you are trying to obtain. However, there are a few general things that should be addressed during the negotiations, consider the following areas:

Having answers to these questions will give you a lot of the information you need to make sure you will be able to use the software correctly without compliance issues. Most products and services can be purchased in a variety of sizes, models, and shapes, each with their own unique benefits and varying costs. Be certain to evaluate each option carefully.

Knowing what you want to say will also help you in figuring out how you will say it. Messaging will be everything and understanding what to say and when to say it will be critical. We’ve seen simple careless statements like “don’t worry about it, procurement is just playing hard to get,” absolutely destroy months of hard work. Make sure that everyone in your company is on the same page of what can and cannot be said and that all departments’ goals are aligned to deliver the best results.

For More Information

Software contract negotiations can be stressful, and it may seem like you’re surrounded by fake smiling faces that are pressuring you into bad deals for software you ultimately don’t need. But it doesn’t have to be this way, with the right tools in place, you can properly defend yourself against these ploys and be able to counter them effectively. Have insight into your own data, prepare, have questions, and above all else, don’t do this alone. At MetrixData 360, we’ve spent years perfecting the art of business negotiations. We’re here to save you money, to stand for your interests and your goals in this venture. If you’d like to learn more about our approach to contract negotiations, you can contact us using the information below and we can get started on getting you the deals you need.

Contract negotiation is not an exact science, it is an art form and to be successful at contract negotiation it takes the right frame of mind. Personality plays a large role in how your contract negotiation will play out and it is more important than ever that companies walk away from their software contracts with a good deal designed to nurture the long-term growth of their company. At MetrixData360, we have sat through countless negotiations and we know what kind of an attitude it takes to see success from one.

1. Positivity

Even though sometimes contract negotiations feel like you’re bashing your head against a wall, a successful negotiator radiates optimism. No matter how good it will feel to let them know just a fraction of your frustrations, it will not get you anything but stony and uncompromising faces. Instead state how happy you are to see your sales rep when they walk in — bring excitement and enthusiasm into the meeting and hopefully it will be contagious.

Now, that being said, don’t be fake with your smile. It’s important that you come across as sincere and genuine. The last thing you want is for your sales rep to feel as though you are untrustworthy. Build your integrity with the sales rep by keeping your appointments, following the rules (to the best of your ability), and remaining honest.

When confronted with challenges, approach the situation without aggression and instead try to phrase your concerns in the form of questions. Make sure that you ask enough questions to fully understand your contract.

2. Bravery

You will also need to be brave in your software contract negotiation. It may seem intimidating but there’s only one way to become braver: do something that you are afraid of and do it often, then it will steadily become less scary over time. In order to build your confidence, it is important to be prepared. You need to make certain you have a strong stance on what you and your company are aiming to achieve. If you are frustrated by a long drawn out process, make sure that you make this frustration known to the software publisher. You will also not be able to win if you are full of fear and uncertainty. That certainty comes from a firm knowledge of what is in your software licensing environment and that your data is accurate Visibility into your data is gained through the successful implementation of software asset management. If you’d like to learn about how you can get started with software asset management, you can check out our article, Getting Started: Implementing Software Asset Management.

3. Ingenuity

Who says there is no room for creativity in the business world, especially in the seemingly unforgiving realm of software contracts? Software publishers are often willing to hear out creative ideas and will reward you for your outside-of-the-box thinking. Creativity is often required if you are going to get what you want out of your contract negotiations. Benchmark your progress with your contracts against past deals you have made with that vendor and use that to build a creative solution.

4. Generosity

As social animals, we tend to gravitate towards people who offer us both kindness and generosity, same goes with your software vendor. We’re not saying you should throw copious amounts of money at the software vendor for no good reason – quite the opposite. Offer up information and be willing to share details and specifics, something that won’t jeopardize the competitive edge of your company, but your software vendor will still find valuable, such as an introduction to a potential client. Such information will generate trust and create a sense of partnership between the two of you.

Generosity is an active form of both empathy and sympathy. Spending some time to understand the needs, wants, and pressures driving your opposition will give you valuable insight into how to tactfully approach the negotiating table.

5. Humility

If you have ever worked in retail, you know the agony of challenging customers. They made your job so much harder, and you counted the seconds until they would leaveleft the room and doing favors for those people was probably the farthest thing from your mind. The life of a sales rep, regardless of whether they sell coffee or software licenses, is hard enough. Making their day that much more challenging won’t get you the software contract terms you want. In fact, it’s a good way to raise the floor-price that your sales rep is willing to go down to.

Be an ideal customer and treat your sales rep kindly. Take the time to understand the sales rep’s motivation, it will help you through your contract negotiations and it will allow you to phrase your position in just such a way to appeal to their interests. Now, being kind is not the same thing as being a pushover — don’t agree to any deals just because you are afraid of hurting the sales rep’s feelings. Be kind but be clear and assertive about your position. A healthy relationship is one where both parties feel respected and heard and is fertile ground for positive negotiations.

For More Information

Contract Negotiations can be frustrating but it’s important that you enter the meeting with the right frame of mind. It can make all the difference if you want to leave the contract negotiation having fostered a mutually beneficial relationship. Now that you have the right attitude, it’s time to set it to work. At MetrixData 360, we have helped hundreds of clients achieve the contracts they want without damaging the relationship with the vendor. You can learn more about how to get ready for your contract renewal by reading our article, 5 Simple Tips for Software Contract Negotiation.

How to Negotiate Software Contracts When You Have No Second Option

Software contract negotiations can be difficult, frustrating, and exasperating. But they can also be tolerable when it feels like you have cards of your own to lay on the table. Having the option to be able to walk away can be the silver bullet in a negotiation:

“I think I’ll take my business elsewhere. I hear your competitors give out enticing offers to new customers.”

Such words usually drain the blood from the sales reps’ faces and they’ll scramble to keep your business, even if it means they keep it at a lower selling price.

But what if you don’t have that option? What if the software vendor sitting on the other side of the table has you pinned in a corner?

This seemingly skewed power dynamic means that negotiating a contract feels more like a shake-down.

What can you do other than bend to their demands, which will steadily get more and more outrageous when they figure out they have you chained to your chair?

At Metrixdata 360, we’ve had many clients come to us in just such a predicament and we’ve discovered that while you may not have the option to walk away, there are still a few cards you can play.

Create a Value Gap

While it’s true you need the software the vendor is selling, very few businesses need 100% of their workforce to have every top-of-the-line software product.

Within a workforce, we have usually seen that around 20% to 30% of workers use the software provided to them constantly. These are the power users. They are the ones who need five monitors and a remote laptop stacked with top-of-the-line software.

Then you have the middle-range users — the ones who would need their desktops but maybe only use two or three programs on it throughout the day.

Lastly, you have people who are on their feet all day, users who share a single computer, or employees who only use software to clock in and out of their shifts.

Software vendors usually arrange their contracts so that 100% of your workforce is licensed as though everyone needs the same amount of software as the tech-heavy user. This is often the source of a lot of wasted money and can be solved by creating multiple “worker types” throughout your company, each with their own licensing requirements to account for the variety of work that is needed to run your company.

If you’d like to learn more about how you can create the value gap with your software vendor, check out our video, The Microsoft Office 365 Value Gap.

Understand Your Software Contract and Your Position

You need to make sure that you know the contract you’re signing up for inside and out. It is equally important that you understand how your company’s software consumption and usage relates to the contract so you can be sure the work you need the software for is sufficiently covered while avoiding paying for features you won’t use.

Make sure that the terms are clearly defined in the contract. Terms like “users” and “devices” tend to be notoriously ambiguous and can lead to compliance issues down the line.

After you understand the license, ask yourself if there are different licensing models that could suit your needs better.

Having clear visibility into your company’s software usage will give you the information you need to make these types of decisions. Don’t expect the vendor to simply offer up these cheaper alternatives for you, you need to do your own research because chances are that the sales rep will try to set you up with the most expensive edition with the least effective licensing model.

You can even negotiate for non-standard language to be added into your contract. These are specific clauses that account for your unique software profile.

One client we recently negotiated for was able to create a clause that outlined specific usage around a single day during the year where their business would spike. Don’t be afraid to push for a hand-tailored contract if it gets you the results you need.

Give Yourself Lots of Time

One client we recently negotiated for was able to create a clause that outlined specific usage around a single day during the year where their business would spike. Don’t be afraid to push for a hand-tailored contract if it gets you the results you need.

Since you don’t have the option of going elsewhere, biding your time may not be the best strategy because the software vendors already know there’s little chance in you leaving.

Instead you need to make sure that you are well prepared. You may have to try a few other tactics to move the process along, such as assigning tasks to keep track of progress or escalating the issue to the sales rep’s upper management (a well-placed call to any higher ups could mean the difference during a stalemate).

These tactics will take, above all else, time and patience. It’s recommended that you begin negotiations anywhere from nine to twelve months before the renewal date to give yourself the time you need.

If you’d like to learn more tricks for negotiating your next software contract, check out our article, 5 Simple Tips for Software Contract Negotiation.

You Can Negotiate a Software Contract (Even If You Can’t Walk Away)

Software contracts are a balancing act. But when you don’t have the option to pick your vendor, it may feel like you’re doing that balancing act with lead shoes on.

Although it may be a more challenging process, there are still cards you can play to get a deal that maximizes your software’s value without blowing your IT budget out of the water. After all, IT budgets are only being stretched thinner these days and IT departments are constantly asked to do more with less.

If you’d like to learn more about how you can get the most out of your software, MetrixData360 is here to help. We have negotiated hundreds of contracts with every software vendor in the market today, from Microsoft to VMware. We speak the language of the software vendors and we know how to get you the results you need.

If you’d like to learn more about how MetrixData360 can save you from wasting your company’s money, check out our contract negotiation page!

If your business is one of the thousands going through tough times during this pandemic, you find yourself budgeting just to keep the lights on and sadly, that means you may be forced to lay off or put on furlough your hardworking employees unless you can come up with some innovative cost saving ideas.  

What makes it worse is that there’s no way to predict what will happen. If you’re planning on rehiring staff, you might be stuck keeping your pricey infrastructure in place even though there’s no one to take advantage of it. 

At MetrixData 360, we recognize that these are hard times so we want to share with you how you can temporarily scale your software estate back without permanently losing your assets.

The ‘Shelfware’ Trap

What is annoying about momentary slumps in business is that they are just that – momentary.

Business will pick up again at some point. Which means that there is hesitation to retire or downsize on any asset because tomorrow your workers will be back on staff and you will need everything in place again.

However, when it comes to your software licenses, it is important to remember that you don’t actually own anything, you’re only paying for the use of that software. If the employees affected by layoffs and hour reductions aren’t using it, why are you paying for it? You’re essentially just giving the software vendors free money if you are doing that.

Many companies do not have a strategy for retiring assets, commonly called ‘shelfware’, where the asset is put into storage and never used again but you are still left paying for it.

In these trying times, unnecessary spend is the last thing you need. Buying products is the easy part, maintaining them and making sure that you maximize their value is more difficult.

Plan A: Read Your Contract for Chances to Decrease Your Software Spend

In current contracts, there are no standard provisions for a long period of downtime. The only clause of that nature would be downsizing due to divestiture. However, the beauty of software contracts is that they can be hand-tailored to the client, so there may be something in your specific contract which could allow you to temporarily downsize.

If you have a license that is committed annually, then depending on your renewal date, you may be allowed to push the renewal date sooner to allow you to talk about negotiating your contract with the vendor.

If you have a subscription, it is important that you decrease your count as quickly as possible and there may be clauses in your contract which allows you to do that.

The longer those counts are in your software environment, the longer they will be costing you money. Most contracts will not let you just decrease your count for your licenses without forcing you to jump through hoops and there’s the tricky part.

You see increasing your licenses with the software vendors is easy, they encourage it and it is almost expected of you within the partnership that you have established with the vendor. It’s decreasing your count that is the issue, your contract may not allow it, but everything is negotiable.

Plan B: Negotiate a Decrease with Your Software Vendor

If you’ve read through your contract and found nothing that could possibly let you lower your counts for the time being, then it’s on to the next step. You’ll need to get in touch with your software vendor and set up a negotiation as soon as possible.

This will be a hard thing to negotiate because during this economic downturn, the software vendors are also taking a hit, so they will probably take an aggressive approach to their sales. A decrease in licenses may be the last thing they will want to hear right now. Here are some tips for dealing with this difficult negotiation.

• Emphasize the value of your long-term partnership over immediate gains. Bring up how long you have been or how long you are planning to be a loyal customer.
• Escalate the issue to the higher ups in the software vendor’s company, if you have the connections.

If you’d like some tips on how to face a tough contract negotiation, you can check out our article, 5 Simple Tips for Software Contract Negotiation.

Plan C: Suggest Alternatives

Alright, so you looked through your contract and you can’t reduce anything, and you talked to your software vendor and they might as well have stuck their fingers in their ears and hummed loudly for all you got through to them.

If you can’t decrease your count, you can try a few of these alternatives with the software vendor to see if anything sticks:

Swap your On-Prem Licenses for the Cloud

<p”>In recent weeks, some companies have completely laid off their workers while other companies have just sent them home.

Applications like Microsoft’s Teams and Zoom have seen a skyrocket of activity and you may find that while you’re struggling to find something to do with your on-prem licenses, at the same time your Cloud platform is stretched to full capacity.

Therefore, you might get some traction with your software vendor if you offer to temporarily swap your on-prem licenses with any alternative Cloud subscriptions the vendor might have.

Microsoft, for instance, is particularly aggressive with pushing its Cloud platform onto its customers, so such an offer might spark their interest.

Push Your Spend Back

If you have a large deal in place with your software vendor over a long period of time, you may ask to just push the spend for this period back into next year. This will give your business the time it needs to recover and will offer the chance to improve immediate cash flow.

Trim Back Any Decoration

In more economically prosperous times, certain applications found in a bundled package may have just been nice add-ons or may have contributed to a better discount at the time. Now is the time to take a hard look at those applications and see if they are really worth the effort and the money to upkeep.

For a more in-depth look on where you can cut savings during times of crisis, you can check out our article, How Will Your Software Contracts Be Affected By COVID-19?

Plan With MetrixData 360

During hard times, it’s more important than ever to be smart with your software. Harnessing these saving opportunities could mean avoiding wasting critical resources on software no one is currently using. 

At MetrixData 360, we know how to cut your software costs down so that you only pay for what you are using and what you need. We have sat through hundreds of contract negotiations and we know how to manage your software to get you the results you need.

If you would like more information, you can contact us for a free consultation.