Across the enterprise IT ecosystem, more and more vendors are passing on some of the burden of high inflationary costs to customers. In the past, a 1 to 3% rate hike was within Fair Market Value (FMV) standards in most cases. In 2022, the perception of “fair” looks more like 3 to 5% as vendors grow increasingly inflexible in their minimum price increases.

As record inflation highs continue, we’ve seen vendors attempt to make increases of 5 to 8% the new de facto standard. Initial proposals with 10, 20 or 30%+ have been observed in some cases.

One example that caught NPI’s attention recently was IBM’s announcement that several z/OS software items are getting an 8% price uplift instead of the typical 5%. IBM’s MLC increase covers the following products: VWLC, AWLC, EWLC, AEWLC, PSLC, CMLC, MWLC, FWLC, TWLC and ESLC for Tailored Fit Pricing.

IBM’s price increase is noticeable as the 5% annual increases announced for many of their other products and agreements was already on the high end of industry standards. Now, IBM seems to be reinforcing a higher “norm” for year-over-year hikes in the foreseeable future. Given the high switching costs of IBM’s products, and decades of establishing strong vendor lock-in across much of its customer base, many IBM customers will have little other choice than to pay these heightened annual increases.

Although some aspects of these annual increases may be unavoidable, NPI has a few pointers for how to help maintain price protection when possible.

Look to Lock in Pricing Proactively for Longer Terms Where Appropriate…

The easiest and most available way to create price protection is through multi-year terms and upfront term payments. But these methods have their own disadvantages as well. Overcommitting or losing flexibility in agreements can often drive costs up over the long term if they’re not analyzed carefully.

NPI encourages clients to conduct deep dive reviews of their IBM licensing agreements and look for opportunities to calibrate terms. Choose longer terms for only a few key line items (as appropriate) and reduce terms on items that may not be needed for an extended period of time.

Many vendors will sell enterprise licensing agreements as a way of keeping price increases in check. NPI finds that the upfront and minimum purchase requirements vendors push as necessary components of ELAs can at times make them more expensive in the long-term than purchasing ‘a la carte’ licensing options. Additionally, many vendors are asking for larger annual commitments without providing the appropriate value back to customers.

Craft Messaging to Push Back on Unfair Increases Outside of Fair Market Value Thresholds 

While some price increases in more niche areas like mainframe solutions may be more heavily affected by inflationary pressures, NPI has seen vendors and resellers over-exaggerate the degree of pricing impacts. In fact, certain IT hardware subcategories have begun seeing costs come down. For example, GPU prices have fallen more than they’ve increased recently due to collapsing demand from crypto miners. This macro effect has started to hit PC/workstation prices with downward pressure now as many consider using n-1 GPUs in current configs because of the cheaper costs and minimal drawbacks.

This underscores the importance of performing IT price benchmark analysis on purchases such as your IBM renewals to determine two things: (1) Are you paying a fair price to begin with? (2) And are the proposed increases justified? Well ahead of your renewal date, start preparing to position yourself to apply competitive pressure. Understanding switching costs for competitive solutions can help you determine if IBM’s price hikes are worth it (and sustainable, given the current trajectory) – and will also signal credible competitive interest that may positively impact price negotiations.

Need help mitigating the impact of IBM’s MLC increases on your IT spend? NPI can help – contact us today.

Sales teams for enterprise IT vendors have always had to be creative in order to make quotas. Meanwhile, customers are scrutinizing larger purchases as IT spend continues to climb year over year. That’s leading many to question the value of vendor’s sales propositions – including whether an Enterprise License Agreement (ELA) makes sense.

Gartner recently reported that customers are struggling to realize the value of ServiceNow’s ELA-style agreements. Consistent with these findings, NPI finds that with ServiceNow in particular, ELA’s require increasing commitments but not necessarily a commensurate benefit in return. Salesforce, as reported in recent filings, is also feeling the pressure of longer sales cycles as “deals are inspected by higher levels of management” as a way of “taking a more measured approach to [customer’s] business.”

Translation: Enterprise IT vendors are having to defend their proposals more vigorously than ever, and ELAs are a prime example – they are an easy way to overbuy and overpay.

NPI recommends focusing on a few key areas when reviewing ELA-like arrangements with IT vendors.

Don’t Assume ELAs Automatically Provide Better Value Than “à La Carte” Purchasing

ELAs and similar purchasing agreements are often pitched as the most cost-effective way to buy for customers with substantial demand. However, this isn’t always true, and in many cases “a la carte” purchasing can be a better fit for enterprises being pushed to overcommit in exchange for “increases on current discounts.” Perform financial modeling to contrast ELA and a la carte models across the term of the commitment, paying particular attention to your roll-out and demand plan.

Involve Senior Decision Makers on Both Sides When Pricing Is Above Fair Market Value

One of the ways to make vendors more receptive to price reductions or other concessions is to involve senior decision makers on both sides. But it’s also important they are prepared to deliver the appropriate level-headed messaging. In many cases, offering a fair price protects future business opportunities and creates a “win-win” for vendors and customers. Vendor-side executives need to be made to “see the light” when prices are knowingly unfair and out of line with the wider market.

NPI recommends making sure execs are prepared for conversations by providing them a business-as-usual scenario and highlighting how any increases need to be justified. Providing details on utilization and any other important factors like growth trajectories will also make discussions more effective and productive.

Does an ELA Make Sense for Your Organization?

The short answer is “it depends.” ELAs can be a good fit. But that depends on the customer’s demand forecast and technology roadmap, how the ELA is structured, and the vendor’s willingness to negotiate key business terms.

As mentioned, ELAs make it easy to overspend and overbuy. That’s why it’s important to perform IT price benchmark analysis for all enterprise agreement purchases, and to optimize pricing, licensing and business terms to assure that the value received matches the commitment required.

As supply chain issues persist across the IT world, shortages have started hitting a new area: cloud services. Recent reports show that capacity issues are affecting Microsoft Azure customers globally – from Washington State to Europe and beyond. More than two dozen Azure data centers are experiencing limited server capacity, and Microsoft expects capacity to remain limited until early 2023.

The implications are noteworthy. Microsoft recently stopped taking new Azure clients seeking both UK-South and/or UK-West based instances. The vendor’s claim is that supply chain issues have limited their ability to build out new capacity in the UK’s two Azure regions. This is despite Microsoft recently opening a fifth Azure region in China while limiting any new instances in their Russian regions.

With these uneven policies evident, it’s difficult to predict where and how Azure capacity limitations may crop up next. What this uncertainty means for Azure customers (mainly those looking at moves to the cloud, but also those with existing workloads) is that a thorough planning review is needed. NPI recommends looking at a few key areas:

Check With Microsoft on Any Regional Azure Instance Limitations

Microsoft’s messaging behind recent Azure disruptions hasn’t been completely clear as far as how capacity issues may spread to other regions. It’s reasonable to assume that some customers may even consider opening new Azure instances in regions outside of their first preference depending on specific use cases. As a first step, NPI recommends engaging Microsoft to confirm capacity in any desired regions where expansion is likely.

Potential Azure capacity shortages may require looking at alternative cloud providers as well – particularly in situations where definite capacity constraints exist. Yes, switching cloud platforms is a significant process but it can be warranted in some instances. Certain use cases may have more feasible alternatives than others, such as using other virtual machine licensing from Microsoft to offload workloads or find other workarounds for capacity issues. This is dependent on existing internal infrastructure to a large extent.

Consider Accelerating Cloud Plans

It’s always smart to plan far in advance for capacity expansions, but even more crucial over the coming six to 12 months. NPI recommends considering the possibility of pulling future demands forward. Planning for cloud services is difficult enough but committing to uncertain utilization rates is a big risk. Having said that, locking in instances in regions with demonstrated capacity scarcity may be a plan to consider for risk management.

Have an Azure Purchase or Renewal on the Horizon?

NPI’s Microsoft licensing specialists can help you optimize licensing and cost. Contact us to learn more.

For the most part, NPI’s clients have good relationships with their IT vendors. Sure, some vendors are less pleasant to do business with than others. But, by and large, there is mutual respect – customers need their IT vendors to be successful and vice versa.

Every now and then, however, an IT vendor goes rogue. Their behavior becomes too onerous, too difficult. What happens then? It’s a question many VMware customers are asking right now. On May 26, Broadcom announced a $61 billion acquisition of VMware that aims to cement Broadcom as an enterprise software giant. How will Broadcom’s acquisition of VMware affect VMware customers?

A Pattern of Concerning Behavior from Broadcom

Broadcom, formerly Avago Technologies, was founded in 1961 as the semiconductor products division of Hewlett-Packard. A few iterations later, the company became a microchip powerhouse – the 9th largest semiconductor company in the world as of 2016. But the company’s ambitions have extended beyond the narrow scope of computer chips. In 2018, Broadcom expanded into the enterprise software space with its acquisition of CA Technologies. A year later, it purchased the enterprise security business of Symantec.

Along the way, a few notable trends emerged for customers:

• Both loyal Broadcom customers and those acquired through CA and Symantec saw dramatic repricing. Increases of 60 to 400% were commonplace.
• Many complained of a slowdown in innovation and support for acquired products.
• Some noticed big changes at the Broadcom deal table. Negotiations were all-or-nothing. If you didn’t get on board with Broadcom’s deal, you had no choice but to switch vendors, which was easier said than done given the entrenchment of Broadcom’s offerings in the enterprise IT ecosystem.

That brings us to now. Broadcom’s acquisition of VMware would be historic in terms of impact to Broadcom’s business and to the number of enterprises affected. The WSJ reports the acquisition would nearly triple the size of Broadcom’s software division and account for nearly 49% of its revenue. Meanwhile, VMware is still the leader in virtualization with more than 400,000 customers, including 100% of Fortune 500 and Fortune Global 100 companies.

What VMware Customers Can Do Now

Will VMware customers get the same treatment as CA and Symantec customers? There is some speculation that Broadcom may adjust its approach given the size of VMware’s customer base, but that optimism is drowned out by Broadcom’s track record. Most customers see the acquisition as a concern or, worse, a threat.

From a procurement perspective, there are some things VMware customers can do now to mitigate negative impacts of a Broadcom acquisition:

1. Customers with a VMware agreement of any size (ELA or ala carte) that is expiring soon should lock in pricing at renewal time.
2. Perform price benchmark analysis on any upcoming VMware purchase and renewal. Securing and locking in the lowest price possible at time of purchase or renewal is key to de-risking the long-tail financial impact of a Broadcom acquisition.
3. Start evaluating competitive alternatives. VMware is entrenched into the enterprise IT ecosystem, so any credible competitive evaluation will take time. Should customers find themselves at the Broadcom deal table, they need to arrive with solid alternatives that meet their requirements and a realistic timeframe estimate for a potential transition.

If you have a VMware purchase or renewal on the horizon, contact NPI for price benchmark analysis.

NPI is often asked by clients, “How much time before the end date of our current Salesforce contract term should we begin working on the next renewal?” The answer may surprise you – especially since many Salesforce customers wait until a few months, sometimes even weeks, before the renewal date to start thinking about it.

With Salesforce specifically, NPI recommends using a different approach: Begin working on your renewal on day 1 of the new contract term!

Let’s break down why. One of the most important aspects of driving the best outcomes with Salesforce during the contract renewal process is customer leverage. When NPI clients begin looking for leverage in the months before their renewal, they realize that they don’t have the time to invest in the best practices that drive the most positive outcomes.

For example, they don’t have time to assess the value of the products they’ve licensed. And since Salesforce is often purchased by multiple business units with different objectives, it can take some time to gain consensus on a set of common objectives for the next renewal. In addition, relationships that take months, and sometimes years, to build are key to your Salesforce vendor management strategy.

NPI recommends that Salesforce customers focus on the following areas to build up their leverage:

Salesforce doesn’t make it easy for customers, particularly larger customers, to get consolidated license information that helps them determine if their investment is optimized. Due to the nature of Salesforce’s products, and to their “divide and conquer” sales strategy (also used by most of the leading enterprise software vendors), Salesforce typically sells into individual business units rather than selling to a centralized core IT organization (we share more in this post). It is typical for companies to have multiple siloed Salesforce Orgs across different business units.

This fragmentation is exacerbated by the fact that Salesforce has not invested a great deal of time building performance management and monitoring tools to help customers gain insight into how their users are using the products that they purchase. This includes the products that are license-based (such as Sales Cloud or Service Cloud) and products that are consumption based (such as Marketing Cloud and Commerce Cloud).

Establishing a clear understanding of your Salesforce estate, level of optimization, consumption rates, and usage rates on an annual basis will give a great deal of insight into how to structure your negotiating position prior to the renewal. It will also give you visibility into unused licenses that can be reallocated (vs. buying additional licenses throughout the agreement term). NPI recommends that you conduct a formal review at the start of each contract year to optimize the current state and plan for the next year. The data insights you gain from this approach will be instrumental in your renewal negotiations.

When Salesforce begins negotiations with a customer, the sales team usually dominates all communications. Relationships with leaders and teams outside the sales organization at Salesforce are critical for driving the best outcomes and influencing your Salesforce vendor management approach. There are two key reasons for this:

• Having relationships with other business units and leaders outside of sales can help with issue escalation and resolution. A common pain point for Salesforce customers is a general lack of responsiveness from the Salesforce support organization.
• Relationships are also critically important in escalating issues when the Salesforce sales organization refuses to make reasonable concessions during the renewal negotiations. Having access to leaders within Salesforce can be instrumental in putting pressure on the sales organization – particularly when sales is taking a heavy-handed or aggressive approach in the negotiations.

Many NPI clients who are Salesforce customers report some issues that Salesforce can’t, or won’t, resolve. It begins with support issues but can expand to other areas such as unexplained interruptions in service, contractual/legal issues that haven’t been resolved, SLAs, and even compliance issues faced by Salesforce customers in a variety of industries.

NPI clients who experience the best outcomes are those that are keeping a close eye on issue management by Salesforce. Issues that require escalation should be documented and shared with Salesforce as they occur, especially in the months leading up to the renewal negotiation. This is particularly helpful when Salesforce takes the position that if you pay more, you will get more in relation to better support – which is something they often do.

Salesforce does a masterful job of identifying and nurturing relationships with the power-users in your organization. While this is good in terms of enabling Salesforce sales reps to understand your needs and plans, it is also an area of “leakage” at renewal time – unintentional, but damaging. Understanding who those boosters are, and proactively aligning roles and communication guidelines as the renewal approaches, is critical for driving the best negotiation outcomes.

Because Salesforce works directly with business stakeholders, IT groups often struggle to keep pace with business unit demands that drive technology purchases. As a result, it is hard for IT organizations to think strategically about their Salesforce investment because Salesforce does not provide that level of partnership to customers unless asked.

NPI recommends that IT organizations begin driving strategic planning with Salesforce in the spirit of partnership. First, NPI advises clients to ask for regular product roadmap briefings on the primary products in use at least twice per calendar year. Second, NPI recommends that senior leaders in your organization (CIO, CTO, VP of IT, etc.) ask for annual corporate and product strategy briefings to be certain that Salesforce’s vision for the future aligns with the IT and business strategy of those leaders. This is also an excellent way to build relationships with key leaders in the product and services (Customer Success) divisions at Salesforce.

Waiting until the last few months prior to a Salesforce renewal will cede significant leverage to Salesforce sales reps. Salesforce has thrived because of aggressive sales tactics in a marketplace that it was able to disrupt. They effectively implement divide and conquer strategies and withhold information to gain the upper hand in negotiations. The only way to effectively counter these tactics and level the playing field is to proactively address the areas we’ve highlighted in this article long before it comes time for your renewal. A small investment of time and effort can yield a large ROI when it is time for your annual renewal.

NPI’s team of IT procurement advisors and Salesforce licensing experts can help you make the most of preparing for your next Salesforce renewal. Contact NPI today to set up a free consultation.

If you’re a customer of Oracle Cloud Infrastructure services, you’ve likely heard of Oracle’s Universal Credits subscription model. Oracle introduced it back in 2017 to better compete with increasingly flexible consumption and pricing options offered by IaaS and PaaS leaders like AWS. While Oracle still trails behind AWS, Microsoft and Google in terms of market share, NPI has seen an increasing number of clients that are investing in OCI services and using the Universal Credit model to purchase these services.

What is Oracle’s Universal Credits model?

This program allows customers unlimited access to all current and future Oracle OCI services (PaaS and IaaS services) based on their need. However, instead of paying for specific services, this is a flexible buying and consumption model for cloud services where customers pick the services they would like to use and use the credits as payment. Oracle typically includes a rate card for the OCI services.

What are the benefits of Oracle Universal Credits?

The benefits of this model include flexibility to use any Oracle IaaS or PaaS services, predictable bills, lower cost (if using the monthly flex model) and ability to use OCI service in any region using the universal credits.

What can you “buy” with Universal Cloud Credits?

Customers can purchase any Oracle Infrastructure or Platform Cloud Services (IaaS and PaaS) that are available on the rate card. The exception to this is Enterprise Analytics Services in North America, which has a separate Universal Credits SKU.

What are the available purchase models for Oracle Universal Credit pricing?

There are two payment methods:

• Pay as You Go – Billed in arrears and based on usage.
• Annual Universal Credit – Billed in advance for a minimum of 12 months for a certain number of credits. Unconsumed credits are lost. Pricing is approximately 66% of Pay as You Go. Most enterprise clients use this model with a certain number of credits per year to spend on the items in the rate card. Oracle Universal credits must be used during the service period and will expire at the end of the year. Any prepaid unused amounts are nonrefundable.

What discounts can customers expect for OCI services?

Oracle is still figuring out its discounting/pricing strategy for various cloud service products. NPI has seen some of the largest variations in discounting for this model that we have ever seen for Oracle Cloud Services – especially in competitive situations.

Oracle lowered the list pricing on OCI services in 2019 and subsequently in August/September 2020 to make it more competitive based on market pricing from Amazon and other providers. Oracle also changed its discount structure to correlate with the lowered list prices. Since October 2020, we have seen Oracle offer comparatively lower discounts which is largely based on volumes.

I’m considering entering a Universal Credits contract with Oracle. What advice do you have?

As mentioned before, we’re seeing greater interest in Oracle’s Universal Credit model. But it’s not for everyone. NPI recommends customers have a solid understanding of what subscriptions fall under the Universal Credits program and the expected usage across their organization. It’s also important to understand which payment method best suits the organization’s requirements. Annual Universal Credit billing may sound attractive, but not if you’re left with unconsumed credits. Also, it’s possible (and encouraged) to negotiate a tiered discount structure based on volumes.

Keep in mind that when an IT vendor attempts to “simplify” consumption or pricing, there is often a trade-off in pricing transparency. For this reason, NPI strongly encourages Oracle customers to request full pricing transparency for all services, including unit list price, unit net price, overage net price and discounts. Performing price benchmark analysis will ensure the customer is paying a best-in-class rate for each service.

Looking for ways to improve Oracle contract negotiation outcomes? Contact NPI today – our Oracle licensing specialists can help.

Here’s a comment we heard recently from a NPI client executive at a Fortune 500 Health and Life Sciences company after they’d just finished a Salesforce renewal negotiation: “We go through all this pain to sign the agreement and I wake up the next morning and have no idea what I paid for.”

If you’ve experienced the same frustration, you’re not alone. The majority of NPI clients communicate a sense of unease about whether they’re managing Salesforce spend effectively. And those that have tried really hard to assure their renewals are right-sized and fair are left feeling bruised and battered because of the experience. When new clients engage NPI to help them optimize Salesforce licensing and cost, the first question they ask is: “What are we doing wrong? Is it always this painful?”

The answer could be explained in part by the large number of acquisitions the vendor has made (70 and growing according to Crunchbase.com). Or the rapid growth of Salesforce over the latter half of the last decade and the near-religious popularity of the product. Perhaps there are a few vestiges of the Oracle mindset of the late 1990s that the founders and early employees of Salesforce brought with them.

But, in truth, it’s more complicated than that. Salesforce spend management has become as important and complex as other leading enterprise vendors like Microsoft, Oracle and SAP – a fact that has kind of snuck up on most customers and, perhaps, even Salesforce.

Some Insight into the Salesforce Psyche

The early growth of Salesforce had much to do with it being a cloud-based disrupter in the on-premise software era. Its early pitch even featured a character that came to be known as “SaaSy,” the “No Software” mascot it used in initial promotional materials. Salesforce started as a sales enablement tool (when CRM was the exclusive domain of sales organizations) that was competing against client/server software packages installed on your desktop or laptop and internal corporate networks. With zero installation friction, Salesforce quietly sold directly to sales leaders and individual business units, bypassing IT organizations entirely.

Shadow IT spend certainly didn’t start with Salesforce, but the vendor played a big role in speeding it along. As more sales leaders saw the value of Salesforce and became good at using it, customers found it easy to switch because the budget wasn’t coming from IT. There was no setup, no negotiating with your internal IT team, and no need to fit into the IT roadmap or backlog. This enabled Salesforce to experience rapid growth because it wasn’t accountable to the traditional gatekeepers of technology purchasing.

As Salesforce began adding products, largely through acquisition, the vendor expanded by selling into marketing organizations and, eventually service/support organizations.

But organizations have caught up. Migration to the cloud and the ubiquity of SaaS for almost every business function have added some necessary friction and oversight back into the SaaS sales and purchasing experience. With IT exerting influence over departments and business units to manage important factors such as compatibility with other systems, data privacy, and data security, IT and procurement teams are facing several challenges that are byproducts of the way Salesforce has done business for almost two full decades.

Challenge #1: Limited Visibility into Product Usage

Salesforce was originally designed to be a sales enablement tool. With the exception of Service Cloud (the support tool), most of the other products are not integrated in a way that provides customers with a consolidated view of usage across the enterprise. Customers use the different products in silos – MuleSoft, Marketing Cloud (Exact Target acquisition), Commerce Cloud (Demandware) Tableau, Slack and so on.

This distributed (vs. centralized) license management challenge is further exacerbated by the fact that most large Salesforce customers will have multiple instances (or orgs) of the same product across their enterprise. As NPI helps clients optimize licensing for upcoming Salesforce renewal negotiations, we have seen a wide range of variability. Some companies have a manageable number of orgs – like five or six. Others have as many as 40! All without any overarching native tools to help customers manage their entitlements and/or consumption rates, identify shelfware or realign deployment as needs naturally evolve and change.

Challenge #2: Divide & Conquer

The idea of divide and conquer is, on the one hand, a likely unintended consequence of the success Salesforce experienced selling to customers in the first decade of its existence. By focusing on business unit owners (Sales leader, Marketing leader, etc.), Salesforce developed the ability to nurture relationships with decision-makers across multiple business units.

Coupled with the frequency of acquisitions, customers often find themselves dealing with multiple Salesforce salespeople for different products, inconsistent terms and conditions in their Salesforce agreements, and multiple product-specific support organizations. This distributed (vs. centralized) relationship makes it hard to consolidate the Salesforce footprint for leverage, and hard to manage accountability when issues arise.

In addition to the practical implications for stakeholders, this distributed relationship makes it especially difficult for IT and Procurement to attempt to regain some control over the purchasing and vendor management process. Salesforce, like most IT vendors with well-trained sales teams, uses this to its advantage. During Salesforce renewal negotiations NPI often observes that while IT Procurement is running the process, stakeholders are unwittingly providing back-door information to Salesforce sales staff that reduces the company’s leverage during negotiations.

Challenge #3: Pressure to Grow

A consistent concern that NPI clients share about the Salesforce renewal experience is the constant drive to grow the size of their spend.

“We were told by our sales rep that they are under a great deal of pressure from Wall Street and that’s why we needed to spend more,” one NPI client shared. “What bothers me is there was no discussion about the value of what we were getting in return.”

Today, large Salesforce customers with multiple orgs have many SKUs and license metrics to consider as they define their demand for a three or five-year renewal. While there is temptation to simply renew historical purchases and add growth, the numbers are getting so big that NPI’s clients are pressing pause and digging deeper into actual usage as well as line-item pricing for renewals.

Of course, as mentioned above in challenge 1, it’s not easy for customers to establish “actual” usage. And NPI clients have observed a reluctance on the part of Salesforce sales reps to share line-item details of specific product costs and quantities in renewal quotes. The pressure to grow was often accepted by Salesforce customers as the “cost of doing business” but that’s starting to change.

[We dig into this further in this short bulletin: Is Salesforce’s Rapid Growth Good for Customers?]

“I call it a shell game,” one NPI client said when talking about negotiating with Salesforce. Another described their Salesforce agreement as a balloon: “When you squeeze one end, the other gets bigger.”

Call it what you will but negotiating with Salesforce can be infuriating – no matter how good your Salesforce vendor relationship may be. The vendor practices wide latitude in pricing when it comes to an individual account. Price breaks on one product can often be offset by charging list or higher prices for another. That makes it incredibly difficult for Salesforce customers to understand what a good deal looks like. There are several products priced as a percentage of net spend, such as SHIELD, support options, and sandboxes – one tactic to look out for is the percentage being adjusted to counter a reduction elsewhere in the contract.

The complexity of today’s large Salesforce estate means that buyers need to give themselves more time to prepare for renewals and to dig deeper into the details to make sure they’re buying what they need at a fair price.

Where Customers are Finding Relief

All these factors create a challenging environment for large companies. With multiple stakeholders in the Salesforce vendor relationship and business units that are motivated by their own priorities, it can be challenging for a company to envision a path forward to keeping Salesforce spend well-managed. And let’s not forget the demands on IT Procurement, who are managing dozens of similar vendors in their portfolios (Microsoft, Oracle, ServiceNow, SAP, IBM…). It’s a lot to contend with and many Salesforce customers find themselves seeking relief from these pressures and challenges.

NPI’s team of experienced consultants, analysts, and procurement experts specialize in understanding the renewal process and working with Salesforce. We have visibility into what your peers are paying for Salesforce, common areas where companies overspend (unused licenses and features, anyone?), and insight into where Salesforce will be flexible at the negotiation table. This translates into significant savings for our clients as they renew with Salesforce.

If you’re a large Salesforce customer, it’s never too early to start optimizing your next renewal. NPI recommends at least nine months of runway. Companies that start planning early have seen that investment pay off with better terms, better pricing, and an all-around better relationship with Salesforce.

Contact NPI to learn more about how to save on your Salesforce renewal while getting the most out of your Salesforce vendor relationship.