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If you suspect your overpaying on your software contracts but are not sure how to check, This is for you. If your department is looking for budget cuts and you want to be the one to bring them to the table? Then you’re in the right place. If you’ve spent weeks trying to organize an in-house negotiation team, and still aren’t getting the results you’re hoping, this service is for you. If you spent hundreds of hours researching on how to get better deals on software licensing but still haven’t gotten those savings, you were dreaming of… If you don’t know exactly what to say in a negotiation to get the concessions you need so that you can find the savings you’re looking for… If you feel you’ve gotten put through the ringer at the last renewal negotiation and want to ensure that doesn’t happen again…
But most importantly,
If these things keep you awake at night AND you distrust software vendors AND want to fight back with negotiation angles you’ve never even thought of before, then you’re really in the right place.
It’s totally possible to find significant savings in your software contracts by researching and negotiating on your own.
However, the problem is that for one person to pull off a successful contract renewal negotiation, they must be adept in the areas of software licensing, contract law, business analysis, and negotiation tactics. And let’s be real here, that one super-human person likely does not exist in your environment.
At MetrixData 360 we’ve known the renewal process is a large undertaking for any one company yet a single person to do. And that’s why we’ve put together a team of negotiators, software analysts, and licensing experts along with our battle tested negotiation process to help guide our clients to negotiation success.
Founded in 2014, MetrixData 360 has been working alongside Fortune 500 companies across the globe for over 6 years. Since then, we have collectively negotiated over $1.5B dollars out of our client’s software contracts. Our negotiation methodology is based on CEO and Founder Mike Austin’s 10+ years of experience at a member of the licensing group at Microsoft.
It was here where Mike helped develop and came to understand Microsoft’s Software Licensing playbook and how they use bundles and complex licensing schemes to get you to buy more than you need. The same one that’s used by Microsoft (and most other vendors) today to get companies to pay more than they need to on their software contracts.
After seeing how the success of the playbook had netted the software sellers billions of dollars, Mike defected to the buyer side, to level out the negotiation playing field. And, perhaps, to even out his Karma as well.
Mike then assembled a team of like-minded industry leading software licensing experts and established the firm known as MetrixData 360 today. Since then, MetrixData 360’s Renewal & Contract Negotiation services have been and are currently being retained by IT, Procurement, and Finance professionals at companies as small as a few hundred employees to the Fortune 500 companies around the globe.
But let’s get back to why you’re here.
Take for example Mrs. G a Procurement Professional with a large Healthcare Organization that we recently helped. She was asked to work on a contract renewal with a CRM software vendor, that was valued at a whopping $2.1M
After realizing this contract was looking slightly inflated Mrs. G had a bad feeling about just simply handing over the company credit card to this vendor. Before we helped her, she didn’t feel like she had the data to make proper decisions. But after, by bringing in the right team, she was able to shave off over a million dollars out of her contract renewal.
Or how about Mr. B, this VP of Procurement at a US Appliance Manufacturer was coming under pressure to reduce his organizations’ annual software spend. He had looked to his yearly $25 Million SAP software costs for a reduction opportunity.
However, since his company had been using SAP for over 25 years and their SAP systems were deeply rooted into his organization, he knew this would not be an easy task. Mr. B was especially worried about SAP’s Indirect Usage rules and creating unneeded compliance risk to the company. He was able to reduce SAP user-based licence cost by up to 40%. 18% savings was achieved through renewal re-negotiations alone and a further 20% was reduced from the Product Support for Large Enterprise (PLSE) support contract.
And how about Poor Mr. M. He is an example of someone who knows you need lots of information but knew he did not have it. Mr. M. The Director of Technology Procurement at a large transportation company was coming up on a 3-year $90M Microsoft Enterprise Agreement renewal. He was worried that both the IT department and procurement did not know where all that money was going or whether the company even needed everything they were buying. He was not looking forward to negotiating from such a position of weakness.
However, By bringing in the right team and getting the right information he was able to remove $30M from the renewal. A 33% reduction in under 4 months.
You’re up late, staring at your screen. Google-ing where and how to find your licensing data until your eyes are red
You hire a professional third-party consultancy to start the discovery process for you.
Hiring a third-party negotiation service makes the kickoff & discovery phase easier and less costly. They will have this process down to a science and will show you exactly what you will need and how the renewal will play out step by step. In the end, it will save your department money, save you time, make you look very valuable, and you will have the clarity to make the right procurement decisions in the process.
Good question. You can do this yourself though it is NOT recommended. It comes down to a couple things: Can you find all licensing documents in a timely manner? 2. Do you understand the legalese in them? And can you compare your contracts to your data accurately? If you want to circumvent these steps, working with a third party is the way to go.
In a perfect world this task would take 2 weeks. However, it may take longer if you decide to do this alone. That’s because you and your team may not know what data and documents to look for. With a third party this should only take between 2 – 4 weeks depending on the software vendor or the size of your software footprint.
You start by asking IT to provide deployment data. What you get are a bunch of spreadsheets that don’t make any sense to you, do not align to licensing and that the IT team can’t explain to you.
You also parse through old contracts to confirm inventory and contract entitlements. Then you review results with team and spend days looking in the wrong spots for negotiation levers.
Fed up at the slow progression, you finally bust out and use that $250K SAM Tool to help create the ELP, but it seems to be wrong, missing information and giving you heart burn.
You call up an expert renewal negotiation team and ask them for some assistance.
They know what you need to defend your position and also get your contracts reduced. They tell you to send over specific types of data that will help your case.
They then peice it together, analyze the findings, and send you back a detailed video and usage document going over the best options for you to take with your software agreements. Then in no time, an accurate ELP (Estimated Licensing Position) is sent to you. Along with a video to discuss what is inside.
It is much cheaper, more accurate, and less of a gamble to get an ELP from a third-party licensing team than buying a SAM Tool or hiring an internal team to do it for you.
Your tool may be able to make an ELP, but the problem is that your SAM Tool is only as good as the user operating it or more importantly the data that is put into it. Do you actually trust the data to create a License Position? Most of the time, the answer is no, or not right away. Because of this, getting an clear picture of your license position will take months of time which is why a third-party approach is recommended.
Maybe but maybe not. Do you know what data that script is collecting, do you have control over the data or does it just get sent to the vendor automatically. Are they collecting information they don’t require with the data. It’s usually better to run your own tools (this is what you use to keep track after all), and have the data quality vetted by experts to ensure you have everything you need. Negotiating the Renewal (Negotiation
You’re ill-prepared and nervous. You go into the negotiation praying you will walk out with the best deal possible
Before talking to any vendors, you develop a negotiation playbook and strategy with your negotiation consultants. They will highlight all the vectors where you can negotiate from to recapture the most spend possible and to keep you compliant as well. You and your consultants review the software vendor’s proposals for risks, benefits, and strengths.
The third party will also tell you what to say and how to say it to keep a healthy vendor relationship while maximizing the amount of savings. Then your third party negotiators will assist you in the final negotiation of the contract renewal. Whether it be they negotiate on your behalf, or feed you the right info for a successful engagement.
You can maximize the savings and minimize the time spent on your next renewal by leveraging expertise of career software licensing experts and negotiators.
We find that to successfully negotiate alone you need to have the licensing knowledge of at least 3 people. That is why we say negotiations are a team effort. However those who do, end up stressing themselves out and come back with only about 2% in cost reductions. That 2% saved is also always made back by the vendor because the solo negotiator does not know what clauses to negotiate out to solidify their negotiation results.
We are glad you are thinking ahead. One of the most dangerous things that could go wrong while you DIY is the risk of leaking sensitive data to your vendor. If the vendor catches wind of let’s say, potential growth of employees in your org, if your renewal numbers don’t match for your growth, they will assume your non-compliant and start an audit.
No, do not take your vendor’s advice on this one. The thought alone of you joining forces with a third-party negotiation team alone makes them shiver because that renewal may not go through as planned for them. Your vendor does not want you to have that independent perspective. Either way we recommend that no matter what they say or how much discount offer they try to dangle in front of you do not take their advice without consulting with an independent source first.
And you’re well on your way to achieving an epicly high savings target this year.
Appoint a teammate to do it
1 Salary for 3 – 4 Months Approx. $24K – $32K
3 – 4 Months
Do it Yourself
Your salary for 2-3 Months Approx $32K +
3 Months at least
Build your own negotiation team in-house
3–5 Salaries over 2–3 Months Approx. $48K–$72K
2 – 3 Months
Outsource to Software
Contract Negotiation Specialists
See Pricing – Dependent on many factors.
1 – 2 Months
Forget about you and your team staying up all night scouring through amendments and service agreements.
We take care of that for you. And our licensing experts will be able to spot things most people can’t. And when we do find you those high leverage negotiation vectors, you will receive video updates on any news.
Don’t worry about wasting time or gambling with inaccurate inventory reports.
We’ve got the data collection process down to a science and will tell you exactly what you need and how to get it. We will also supply you with the tools if needed.
Close down your excel spreadsheets and send your data over to us.
We have the processes and team needed to accurately plot out your Inventory and entitlements to create you an ELP that will pull you ahead in the negotiation.
Stop stressing about going toe to toe with the software vendors.
We will tell you what to say and how to say it, so you can be the one to bring home the savings on this renewal. We can also negotiate on your behalf if you desire.
Stop spinning your wheels, wondering how and where you should start.
When you work with us, you receive the negotiation battle plan, the timelines, and detailed instructions on how we will go about the renewal negotiation process together.
But now, you can use our battle tested approach to remove thousands of dollars without hiring any Full Time Employees or having your internal team angry at you for wasting their time.
The Negotiation Road Map.
We will tell you the ins and outs of the negotiation process. You will learn the steps involved, the timelines, what to expect from your vendors, and what deliverables are needed to get the show on the road.
Our experts will help you round up and find all information needed to add leverage to your negotiation position. From our past experience we will provide or recommend tools and scripts to safely get data needed from your organization.
We perform an in-depth contract & entitlement analysis which includes:
ELP Creation & Optimization.
You will receive a document that lays out what software products you are legally entitled to use in your environment. Inside it will also tell you what software setups will best suit your organization going into the future and if there are any compliance risks involved. The ELP will serve you well into the future in case of a vendor audit. However, that will be unlikely, because after your negotiation they will be looking for an easier target.
This will allow you to use our experts to A) step into the negotiation on your behalf to get your contract cost down. Or B) have our experts help you behind the scenes to get you a successful contract negotiation. Or C) any combination of the two that works best for your style.
To provide our clients with optimal customer service, we have limited our Renewal & Contract Negotiation service seats to 10 clients per month. Make sure to reserve your seat if you’re interested.
So, let’s recap what’s included in the Renewal & Contract Negotiation Service:
And if you are one of the next 10 to sign onto our service, we will include a free Office 365 Assessment (A $35,000 value.) so you can continue to keep those software savings coming in.
When accessing the annual use of their CRM software, they realized they had a $2M true up that they did not budget for. They were unsure of where they were going to find the money to pay for this, as it was not planned. What they thought they were going to have to purchase was: $425K for Reinstatement License Fees, $220K for Maintenance on those reinstated licenses, $1.2M for additional usage fees, $216K for Additional Maintenance fees If we add that all together, the total for this renewal was adding up. In fact, the total cost of this renewal was slightly over $2 Million. Total Renewal Cost Before: $2.061M
Removed over $1,600,000 from contract. In 1 Month
How did they do this? By digging into this client’s Master Services Agreement contract, we helped them look for language around counting licenses, paying for licenses and when to pay for those licenses to get an understanding of how they arrived at those initial costs. We noticed that there were 4 different users types identified in the contract, but that they were only using 2. In fact not all users would require a license as some were licenses based on how many times they accessed the system. After analyzing the data, it was here, we found they had been unfairly paying for over $400K worth of licenses for this class of users. With this latest information we checked through all amendments to see if other purchases, reductions, or changes to pricing were made. In an amendment another user type was added that was not being leveraged correctly. This amendment was over 7 years old and pre-dated the existing team and they never even thought to review it.
The next step was to review the deployment data, to see a report on how they were licensing their users and how those licenses were actually being used throughout the year.
It was here where a discrepancy in counting different user types was found as well. The client was about to be paying the regular-user price for the user types identified in the contract and amendment review. By fixing this alone it reduced costs by almost ~$600K on the annual spend.
The last thing identified was that there were spikes in the data that reflected more people logging into the system at the end of the year. Instead of buying all the licenses upfront for the whole year, they negotiated a monthly subscription model and only ramp up subs on those spike periods. Further saving in licensing fees down the road.
Before our services were implemented, this International Retail Chain had recently acquired another large chain. Both organizations had Unlimited License Agreements (ULA) with Oracle. The main chain’s Oracle ULA had been increasing 30 – 40% for each renewal. Because of this the client was hoping to reduce or exit this ULA. However the client was worried about Oracle’s strict virtualisation licence rules and was concerned about potential punitive audits upon ULA exit.
Unfortunately, this client had limited visibility into their Oracle estate, no thanks to this new acquisition also. This client was left wanting to consolidate the various agreements owned by the acquired company with its group agreement for better pricing and easier management.
Consildated multiple Oracle ULA’s into one for easier management and savings of approximatley 35% on total overall Oracle spend.
Our experts showed him how to do this and after remediation, this client’s virtualization environment was certified by Oracle prior to the end of the then current ULA. Because of the data validation performed, no audit was triggered. A new group-wide ULA was also negotiated, but with a much smaller product scope (core database products and features only. and as a result the committed ULA contract value had been reduced by approximately 60%. Then, after factoring the additional transactional spend post ULA reduction, the overall annual spend with Oracle had been reduced by approximately 35%.
This client had SAP for over 25 years with a usage footprint that spanned across four continents. The client was under cost pressure to reduce its annual software spend, while SAP was one of the most expensive agreements in its portfolio (approximately $25 million / year).
The client had more than 350 SAP systems, some of these are Advanced Business Application Programming (ABAP) based but many more are Java based legacy systems. The client was concerned about the potential Indirect Usage risk and was planning to migrate to SAP HANA over a 3-year period and wanted to ensure the migration roadmap was fully cost assured.
After they called us in, our experts identified a potential to reduce the client’s SAP user-based licence cost by up to 40%. In the end approximately 18% savings was achieved through renewal re-negotiations alone.
Under MetrixData 360’s guidance, the client had successfully negotiated a consumption-based license model at no extra cost to completely remove its Indirect Access risk. This was achieved as part of the Product Support for Large Enterprise (PLSE) negotiation. We also reduced the PLSE minimum commitment value by 20% from SAP’s initial proposal.
Excellent question. The cost of this service depends on your company size, amount of data, length of engagement, type(s) of software vendors and pricing model you choose. However, we typically see that this service can cost from $25K to $200K. However, no matter how much it ends up being, we are confident we can provide you with a strong return on investment regardless of the price paid for this service. Also, we are always flexible with our pricing to help align with your organization’s budget, comfort level, and risk tolerance.
Not with that attitude you can’t! If you want your company to increase its cash reserves during the COVID-19-cutback season you can’t afford NOT to implement MetrixData’s Contract Renewal Services.
But seriously, If you’re worried about the price, ask about our new pricing model which is based on contingency. This means that you only pay a percent of the savings found from your contract. This is a risk-free and low-cost pricing model we can offer you if desired.
Think of it like this: we are a lot like Batman’s right hand man Alfred Pennyworth. We supply you with the knowledge, ammo, insight, negotiation prowess, cool gadgets, and everything else that helps you fight crime in Gotham City.
We’re also not lawyers. We are Software Licensing Professionals first, and we take a more consultative and educational approach to all our client’s renewals & contract negotiations. We do the groundwork for you, and our goal is to make you look good throughout the whole process while also saving you a significant amount of money on your software spend.
Excellent question, your results will vary depending on how close you follow our Renewal & Contract Negotiation Processes.
To give a general figure of the results, we see around a 20 – 40% in reduction of contract spend. However, that percent saved, is just one part of the many benefits that come from our Renewal & Contract Negotiation Service. Other benefits could include:
Here’s the deal. If you wait, nothing will change, and your IT Department will be continually losing money each month. The painful renewal process will stress out your team every time one comes due. And on top of that, our bandwidth may be used up by the time you contact us.
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Good question. Essentially when you sign up for this service you get a dedicated Renewal and Contract Negotiation team plugged into your department. Our team will work with you to lay out the blueprints to get the maximum leverage for your negotiations.
We have an extensive collection of slides, white papers, and video content at the ready to inform anyone on your team of how we do what we do. And most importantly, how it can help you with your renewal negotiation. If you’d like. Feel free to set up an online meeting with us and we can give you these assets and help you explain this info to your team.
CEO and Founder of MetrixData 360 Inc. Ex-Licensing Specialist for Microsoft and globally known Software Asset Management Expert.
Licensing specialist for Oracle, IBM, Autodesk, and Adobe software.With over 10 years in the SAM industry Kris leads client’s to savings through optimization on unique types of software.
VP Services, Leads all tool development and delivery of client projects. Leads the development of Office 365 Optimizer.
There’s a lot we could tell you about the company so we’ve made a video to explain it in the quickest way possible. Take a watch!