From Zoom to Microsoft 365, software as a service (SaaS) apps are essential to your firm.
But many companies overspend on SaaS due to platform redundancies, overlooked auto-renews and missed opportunities to re-negotiate subscription/license terms.
Getting more SaaS value
According to Murali Saravu, founder of pricing and billing automation provider Monetize360, more and more of your peers are talking to their vendors about replacing SaaS subscriptions with billing based on software use.
The reason? It eliminates high up-front payment. Also, getting visibility into actual employee usage of services so you can make good decisions about whether the cost is justified.
So Saravu advises these moves to optimize your SaaS contracts and spend:
- Get service usage reports and statistics from your vendors.
- On a scale of 1-10, score how critical all cloud/SaaS services are to the company. Seek input from your IT team and software-using stakeholders.
- Review contracts and explore what can be negotiated. Services that aren’t used much can be switched to pay-as-you-go. High-use services can move to an enterprise agreement approach.
- If you have a couple services from the same vendor, ask for a virtual token model that can be used across services, and
- Ask about ramp-based usage contracts (e.g., first year: one to 100 users, second year: 101-200, third year: 201-300, etc.).
