In our 21 years of business, no year has been quite as pivotal as 2024. The changes were big, the work was bigger, and the results have surprised even the most seasoned NPI’ers. Here’s a recap:

Top 5 Enterprise Software Deal Savings

The savings being driven for our clients have jumped dramatically. We used to get giddy with 7-figure savings. Now, it takes 8-figures to generate that level of excitement. Here are the top five software deals by savings in 2024:

• $77 million on VMware
• $31 million on Salesforce
• $30 million on Splunk
• $25 million on Palo Alto Networks
• $22 million on Broadcom

The top eleven suppliers reviewed changed in 2024. Why eleven, you may ask? Well, the team decided they were tired of Top 10 lists. So here are the top 11 IT vendors we saw in 2024:

Workday and CrowdStrike dropped off the top 11 suppliers from 2023, making way for SAP and IBM.

Our analyst team is hands-down the MVP of 2024. The final numbers aren’t in just yet, but the volume of deals submitted reached an all-time high as more and more clients integrate NPI into their IT procurement workflows. Correspondingly, the savings our analysts identified reached an all-time high. They are amazing. Full stop.

The number of new enterprise-grade IT vendors entering the marketplace is astounding. At NPI, we analyzed deals from over 500 new suppliers, blowing previous years’ numbers out of the water. As a result, we have a new protocol developed specifically for analyzing deals for emergent IT suppliers.

This year, we’ve made several transformational announcements:

1.     The Launch of Vantage Pro – the world’s first platform purpose-built for IT procurement. In July, Vantage Pro emerged from Early Support to General Availability. We believe the platform is the future of category-specific ProcureTech, with AI-enabled tools empowering IT procurement practitioners to do their jobs faster, more easily, and with better negotiation outcomes.

2.     Making Spend Matters’ 50 Providers to Know List. The team at Spend Matters is one of the few organizations tracking the ProcureTech landscape, and the trajectory of NPI’s technologies and services (see #1) has captured their attention. Now in its 11th year, this list highlights the top performers in the supply chain and procurement sector, recognizing companies that deliver exceptional value and innovation.

3.     A significant growth investment from Falfurrias Growth Partners. The stage was set for a year like no other in January. We kicked off 2024 with a game-changing investment from the team at Falfurrias, which has accelerated our product development and growth initiatives.

Understatement of the Year: “Our product development team was busy.”

To say our product development team was busy in 2024 would minimize and downplay their efforts. They were swamped, and enthusiastically so. Thanks to this team, NPI became a full-fledged technology product company this year. The accomplishments are too numerous to count, but we’re going to try:

• 5 AI-powered applications built in 2024 using 6 different AI technologies
• 20+ major capabilities released in 2024 for the Vantage Pro platform
• SOC 2 certification by independent auditor
• Increased 3X software development horsepower in 2024
• Increased 5X the self-serve-research supplier coverage in 2024 to over 1,000 supplier
• 100,000 lines of original proprietary code written to support Vantage Pro, with a total codebase of 11,000,000+ lines. That’s more lines of code than many popular operating systems and illustrates the vast scope and complexity of our platform.

Our Proudest Achievement: Client Satisfaction

These are the stats that sum up why we do what we do. Our client logo board looks like the Who’s Who of Global Industry. And they are happier than ever.

• Current Fortune 500 Client Count: 134
• Renewal Rate: 90% (again!)
• Net Promoter Score: 92! For reference, anything above 80 is the top percentile. Here’s what the survey experts over at Qualtrics have to say: “This is the Holy Grail of NPS, and rarely attainable. A company with a score in this (71-100) range is considered to be among the absolute best in their industry.”

2024 was a wild ride in all the best ways. It was exhilarating, challenging, and full of growth and development. We’ve emerged as a better team with even stronger capabilities and focus.

In 2025, we will turbocharge the value we deliver to clients at every juncture – from our products and services to in-person learning and training and everything in between. We’re immensely proud and thankful for our team and for our clients as they join us on this adventure, and we look forward to setting the bar even higher in the year ahead!

Microsoft recently put up guardrails around the definition of External Users – an update enterprise customers should be aware of as they think about software license compliance.

Currently, the term “External Users” refers to users that are not employees, onsite contractors or onsite agents of Customer or its Affiliates. As of October 1st, the definition of External Users has been modified for products that include External Users’ use rights in the product terms. 

The new definition refers to users that are not (a) employees of Customer or its Affiliates, (b) contractors or agents that typically work for Customer or its Affiliates for more than 30 hours on average per week, or (c) contractors or agents that typically work onsite for Customer or its Affiliates on each working day.

The new definition of External users adds a little more precision to Microsoft’s previous definition.  This is important for legal reasons, particularly as it relates to software licensing compliance, where having a precise and unambiguous definition is essential. The updated definition provides more flexibility but also requires organizations to define who is and isn’t an external user

The changed definition only applies to customers who sign an enrollment or agreement on or after October 1, 2024 and applies to the following products:

• Microsoft Teams
• Office Servers
• Office for the Web
• Office 365 Services that include Yammer
• OneDrive for Business
• SharePoint Online
• Microsoft Entra ID
• Dynamics 365
• Windows Server
• SQL Server
• Exchange Server
• Project Server
• SharePoint Server
• Skype for Business Server
• Azure DevOps Server
• Windows Multipoint Server
• Advanced Threat Analytics
• Microsoft Endpoint Configuration Manager
• System Center Data Protection Manager/Protection, System Center Orchestrator/Operations Manager/Service Manager

A Note About Windows and SQL Server

Previously, customers could use the Windows External Connector as an ‘unlimited’ Windows CAL for non-employees, with each server that non-employees access requiring this license. This license still has its place for users that do not meet the new definition for External Users.

The addition of SQL in the product list above is an enigma. SQL already has 2 different models of licensing:

• Server/CAL – this model of licensing is only appropriate when the SQL database is only accessible to employees; the Server would consume a license and each employee would get a CAL. With this model of licensing, External Users would get a CAL, just like a regular employee.
• Per Core – this is an ‘unlimited’ model of licensing, each core on the server would consume a Core license and anyone -employee or non-employee are licensed to access that database.

There remain many products for which there is no exception for External users, and with the addition of Project Server to the list of products, all the remaining products are online services. Given the licensing model for online services, where the vast majority of products are licensed in the per user mode (per user, per month), we don’t anticipate a change to these offerings in the near future.

If you have questions about Microsoft licensing and compliance, NPI can help. Contact us to learn more.

As enterprise IT procurement practitioners can attest, navigating Oracle’s evolving Java licensing landscape is challenging. With the shift to an employee-based licensing model for Oracle Java SE, the stakes are higher than ever. Enterprise customers are experiencing cost increases of 2x to 10x – or even higher in some cases.

The good news? Proactive measures can go a long way in helping minimize the financial impact of these changes on your next Oracle Java SE purchase or renewal.

For a deeper dive into these tactics, read our bulletin on Oracle Licensing Update – How to Mitigate Higher Costs on Your Next Renewal.

Understanding What’s Changed with Oracle Java SE Licensing

Historically, Oracle’s Java licensing relied on Named User Plus (NUP) and Processor metrics. These models offered predictability, with licensing based on specific users or server processors. However, in 2023, Oracle transitioned to a new model tied to an organization’s total employee count – a broad definition that includes:

• Full-time, part-time, and temporary employees
• Contractors, consultants, and agents supporting business operations

This change simplifies some aspects of licensing but introduces significant cost implications, particularly for large enterprises. With Oracle’s aggressive pricing strategy, nearly every organization will face higher licensing counts and substantial cost increases. Furthermore, Oracle continues to enforce complex conditions for virtualized environments, which can exacerbate compliance risks.

Four Actionable Steps for Oracle Java SE Cost Mitigation

Mitigating the massive cost increases caused by changes to Oracle Java SE licensing requires diligence and preparation. Our recent bulletin shares four actionable steps to help you navigate these changes. Here are highlights:

1.  Conduct a Comprehensive Inventory

Inventory all server and workstation environments. Identify Java versions, editions, and specific assets. Be sure to use multiple data sources to ensure no deployment is overlooked.

2. Validate Oracle’s Employee Count

Calculate paid subscription requirements under both the old and new metrics. Verify Oracle’s employee count definition to avoid unnecessary costs.

Establish a clean renewal baseline and eliminate unnecessary subscriptions. Reassess your environment post-remediation to ensure compliance – this is critical! Oracle is a top offender for software license audits, and Java licensing confusion is an opportunity for them to sniff out non-compliance across your Oracle estate.

Where feasible, investigate OpenJDK or other non-Oracle Java solutions. Even if a full migration isn’t possible, alternatives can serve as leverage in negotiations.

Pushback Against Higher Oracle Java SE Costs with NPI

The steps above are a blueprint for helping enterprises mitigate higher Oracle Java SE costs. For customers who have a renewal planned in the next 12 months, time is of the essence. Execution of these steps requires significant runway and customers may not have the internal licensing expertise and resources in-house.

Larger, more complex Java estates have benefitted from partnering with external licensing experts like NPI. Our Oracle Java License Position Assessment Services are designed to help enterprises analyze the financial impact of Oracle’s new pricing model, develop cost-saving strategies, and evaluate alternatives.

Here’s a real-world success story:

• The Situation: A Fortune 500 financial services company faced a daunting renewal, with Oracle pushing for employee-based Java SE licensing.
  
  
• The Solution: The client engaged NPI’s Oracle Java License Position Assessment services to identify all Java installations, eliminate unnecessary installs to reduce their licensing footprint, and negotiate with Oracle to avoid additional license purchases. 
  
  
• The Outcome: The client saved $2.5M with NPI’s expert guidance.

Don’t let new Oracle Java SE licensing overinflate your Oracle spend. Contact NPI today to learn how we can help you save big on your next renewal.

The sourcing and procurement landscape for the information technology category has undergone a dramatic transformation in recent years, driven largely by the explosion of enterprise IT spend. In a recent episode of The Sourcing Industry Landscape podcast, SIG President/CEO and host Dawn Tiura sat down with NPI CEO Jon Winsett to discuss the key dynamics shaping this critical spend category.

As Winsett explained, technology has become the lifeblood of modern businesses, with IT spend now topping $5 trillion globally. This has thrust IT procurement into the strategic spotlight, with savvy sourcing teams playing a crucial role in managing this sprawling and complex area of spend.

One of the biggest challenges, according to Winsett, is the relentless tactics and “tricks” employed by major technology vendors. Here’s what he had to say: “You’ve got some of the biggest companies in the world, tech companies, manned by some of the brightest minds in the world with one singular objective, and that is to extract the maximum revenue out of the coffers of any enterprise.”

This includes everything from convoluted licensing terms that change quarterly to aggressive auditing practices that can hit companies with millions in unexpected fees (often as a result of those convoluted licensing terms). Winsett pointed to the recent Broadcom-VMware situation as a prime example of category tactics.. VMware, upon its acquisition by Broadcom, hiked prices by 5x or more for some customers. When a customer’s annual spend is in the millions with a vendor like VMware, an unbudgeted 5X increase gets C-suite attention.

Even more concerning is this vendor behavior is trending. Vendors are paying attention to the Broadcoms of the world to see how these tactics play out. So far, it’s working. The days of typical 10% price uplifts may soon be replaced by 5x to 10x cost hikes. Another case in point? Oracle’s new employee-based license metric for Java.

To combat these challenges, Winsett offered several pieces of advice for IT procurement professionals:

1. Benchmark pricing: This can save up to 50% just by understanding where you stand compared to the market.
2. Conduct license position and optimization assessments: Especially for strategic software estates like Microsoft, Oracle, IBM and SAP, it’s crucial to fully understand your entitlements and how you’re actually consuming the licenses. Proactive assessment of large software deployments gives you the data you need to accurately define renewal baseline requirements, so you don’t renew more than you need. Equally as important, it allows you to identify and remediate compliance issues before the vendor gets involved.
3. Leverage AI: New AI-powered tools can provide valuable supplier intelligence, workflow automation, and data cleansing capabilities to support the procurement process. It has the potential to save companies millions of dollars and thousands of manhours a year.

For more insights on how IT sourcing can more effectively negotiate with tech suppliers, listen to the full podcast.

If you haven’t noticed, a major enterprise PC refresh cycle is underway and vendors like Lenovo, Dell and HP couldn’t be happier. The last several years have been a rollercoaster for the PC market, marked by significant fluctuations that are driven by a combination of factors.

Initially, the pandemic fueled a surge in PC demand as remote work and online learning became the norm. In 2021, global PC shipments reached a peak of 360 million units, representing a 15% YoY growth, according to data from IDC. However, this momentum began to wane in 2022 as the initial pandemic-driven demand subsided and economic uncertainties emerged.

In 2022, global PC shipments declined by 16.5% YoY to 301.2 million units, marking the steepest annual decline in nearly a decade, as reported by Gartner. Double-digit declines persisted in 2023.

In 2024, the market finally found better footing. Despite a modest contraction in Q3, most vendors have experienced a solid growth trajectory throughout the year. And there are no signs of a slowdown anytime soon. Gartner estimates the PC refresh cycle will hit its peak sometime in 2025.

What’s Driving the PC Refresh Cycle?

Our deal traffic mirrors this prediction, with many clients currently either in the middle of or planning a large-scale PC refresh. Reasons include:

• Aging Devices/End of Windows 10 Support: Simply put, it’s time. It’s common practice to refresh PCs every 3 to 4 years to make sure devices meet new performance, efficiency, and security requirements. The last refresh cycle was 2020-2021, which puts us on track. Case in point: The end of Windows 10 support is scheduled for October 14, 2024, at which time Microsoft will no longer provide security updates or technical support for the OS.

• Potential Tariffs: The incoming U.S. administration has proposed tariffs that could drive up PC pricing. As a result, many enterprises are prioritizing and bringing forward PC refreshes to mitigate higher costs.

• AI Requirements: AI features in enterprise software (e.g. Microsoft, SAP, etc.) are driving hardware refreshes to meet minimum performance requirements. Microsoft introduced Copilot+ PCs in May 2024, which they’ve billed as “a new category of Windows PCs designed for AI.” OEM partners include Acer, ASUS, Dell, HP, Lenovo and Samsung.

The Most Effective Way to Avoid Overspending on a PC Refresh

Large-scale PC buys may not be the most exciting line item in the company’s IT budget. As such, many purchases are made without the same rigor that’s applied to a major software or cloud purchase.

That’s a huge mistake – one vendors will count on enterprises to make in the current refresh cycle.

The majority of PC vendor quotes are overpriced. As a result, enterprise IT procurement teams regularly overspend 6 to 7 figures on large PC orders. The best and easiest way to avoid overspending is to perform IT price benchmarking on these purchases. Determining best-in-class pricing targets will give you the leverage you need to negotiate better pricing and discounts.

Here’s a real-world example of how NPI helped one client save on a large PC refresh with Lenovo:

How to Get Started with IT Price Benchmarking

Price benchmarking is a common best practice for any large-scale IT purchase, and it should be applied to hardware purchases (like PCs) as diligently as a large software renewal or cloud deal. Pricing variability is rampant for PCs. What one company pays for a similarly scoped purchase could be paying hundreds of thousands (or millions) of dollars more or less than the next customer.

If you have a PC refresh on the horizon, prioritize IT price benchmarking. PC vendors have a lot to gain in 2025 without enterprises paying 10 to 20 percent more than fair market value.

Learn more about Vantage – NPI’s enterprise-only subscription service for IT price benchmark analysis and negotiation intel. Contact us today.

In a recent gathering of our Customer Advisory Board, IT procurement executives from Fortune 500 enterprises shared insights into the trends and challenges shaping the IT sourcing landscape. These discussions offer a snapshot of the pressures and opportunities they face heading into 2025.

It’s not lost on us that these leaders are under conflicting mandates during a time of historic technological transformation. Harness innovation so the business can better compete. Meanwhile, get more value out of existing IT investments. And do it all while reducing cost and compliance risk.

Here’s a recap of some of the trends and concerns our customers shared during our recent meeting.

Generative AI Adoption – Opportunities and Growing Pains

Generative AI continues to capture the imagination of enterprise IT teams. High adoption rates for tools like GitHub Copilot underscore the technology’s transformative potential. One organization reported dramatic efficiency gains, with employees saving hours on tasks through Copilot integrations with O365 and Dynamics.

However, members emphasized the importance of clean data. Dirty data and poor data governance can lead to inaccurate training models, undermining AI-driven decision-making. Enterprises also voiced concerns about data privacy and immaturity in some products, such as Gemini AI.

In addition to bringing strong IT price benchmarking and negotiation intel to the deal table, leaders shared these best practices:

• License Management: Organizations managing AI licenses in bulk are implementing systems requiring user certification and returning licenses to the corporate “pool” if unused after 30 days.
• Negotiation Wins: It’s still possible to secure AI capabilities at no additional cost by integrating them into larger vendor contracts, a strategy yielding immediate ROI.

SaaS and AI Integration Gains Traction

The integration of SaaS and AI tools is becoming a key focus. Enterprises are leveraging AI-enabled tools to better manage sprawling software environments. These integrations are helping organizations align AI capabilities with broader transformation goals while maintaining visibility and control.

Tail spend (low-value, high-volume purchases) remains a persistent challenge for Fortune 500 companies. Without clear strategies, organizations risk overspending and missing opportunities to consolidate or optimize spending. Tail spend was identified as an area ripe for improved tracking and management to generate immediate cost savings.

Underutilized Licenses, Virtualization, and Renewal Baseline Optimization

Unused software licenses were flagged as a common issue, with companies reporting a significant percentage of certain estate licenses sitting idle. This is particularly true in large SaaS estates. This underscores the need for regular SaaS license optimization assessments that identify unused, underutilized, and no-pulse (e.g. printers, conference rooms, etc.) licenses – especially in advance of renewals.

Virtualization is also a sore spot for cost management. Virtualization teams often neglect or underreport optimization opportunities, leading to inflated renewal baselines. Clients stated that NPI routinely finds 15% (or higher) cost savings opportunities through non-disruptive optimization with vendors like VMware. That’s an important point for anyone with a VMware/Broadcom renewal, where an inflated renewal combined with VMware’s recent licensing metric changes can be catastrophic.

Speaking of Broadcom, they continue to be thorny. Customers are approaching VMware renewals with substantially more rigor since Broadcom’s acquisition. Many are giving their organizations 18+ month runways to evaluate credible alternatives and strategize how to effectively negotiate with a vendor that has been holding many customers hostage. Those customers considering moving licenses away from Broadcom are concerned the vendor will retaliate by raising prices on remaining licenses.

It’s not surprising that demand for NPI’s VMware renewal optimization services has spiked in the second half of 2024. Companies are looking for guidance, assessment, and leverage ahead of Broadcom negotiations. Specifically, they need:

• Full visibility into their VMware estate (typically larger than the customer realizes)
• Cost-modeling for VMware’s new core-based metrics and subscription pricing
• Strategies to maximize density and capacity, reducing VMware’s footprint, and mitigating licensing impacts
• Discovery of any compliance issues that may need remediation

Note: NPI finds significant cost savings opportunities – typically 7 figures – in 100% of the VMware renewals we help our clients optimize.

Key Takeaways for IT Procurement Leaders

If we had to boil our conversations down into three key takeaways, they would be:

1. Focus on AI Enablement with Strong Cost Management: Develop a roadmap to scale AI adoption responsibly, balancing innovation with privacy concerns and operational readiness. Negotiate world-class pricing while keeping licensing clean.
2. Audit and Optimize: Regularly audit software licenses and infrastructure baselines to uncover cost-saving opportunities – especially with vendors like SAP and VMware.
3. Tail Spend Discipline: Implement policies and tools to tackle tail spend effectively, ensuring it doesn’t erode budgets.

The coming year promises to be one of the most pivotal yet for IT procurement. After 21 years of advising large enterprise IT procurement teams, we can confidently assert that the stakes have never been higher. We recognize that knowledge-sharing will be crucial as IT procurement leaders navigate new territory and we want to be a facilitator. NPI will be hosting more peer-based events in 2025 – follow us on LinkedIn to stay informed and connected.

The world of IT procurement is gearing up for a major transformation by 2030. In the coming years, IT procurement will step into the spotlight as a strategic powerhouse, influencing technology decisions that drive business success. These emerging trends promise to reshape how organizations approach IT sourcing, bringing procurement teams closer to the heart of business strategy and ensuring they are essential players in the digital future.

Here are five key trends that will redefine IT procurement over the next decade.

1. IT Procurement Embedded in Every Tech Decision

IT procurement will extend its reach beyond simple transactional roles, becoming a critical partner in all facets of technology strategy and operations. This expanded role will see procurement teams involved earlier in project cycles, ensuring alignment between technology investments and organizational goals. By engaging early, procurement will help manage vendor risk, optimize financial outcomes, and contribute strategically across the enterprise.

2. AI-Enhanced Vendor Intelligence Becomes Essential

Artificial intelligence (AI) will be a cornerstone in vendor management and negotiations. AI-driven insights will enable procurement teams to access real-time intelligence on pricing trends, licensing, supplier risk, and market data, driving better negotiation outcomes. Relying on AI-powered insights will no longer be optional; instead, it will become a standard for achieving competitive terms and reducing supplier risk.

3. Rise of Specialized IT Procurement Platforms

As procurement teams face increasing transaction volumes and complex vendor landscapes, purpose-built tools for IT procurement will become invaluable. These platforms will streamline purchasing, contract renewals, and vendor management. Unlike generalized procurement tools, these specialized platforms will cater specifically to the unique demands of IT, enabling procurement teams to efficiently handle high transaction volumes while maintaining compliance and cost-effectiveness.

4. Practical AI for High-Impact Outcomes

AI will be deployed selectively within IT procurement to achieve practical, high-impact results. Rather than focusing on overly complex AI applications, procurement teams will harness AI to enhance productivity in negotiation and buying processes. Key applications will include contract analysis, spend forecasting, supplier risk assessment, and identifying opportunities for cost consolidation. This pragmatic use of AI will transform procurement workflows, empowering teams to make data-driven, strategic decisions.

5. A New Approach to Contract Management

Managing IT contracts will become a top priority, with procurement teams demanding tailored solutions that go beyond generic contract management software. As procurement teams strive to access organized, high-quality data on IT purchases and renewals, they will seek solutions built specifically for their needs—facilitating better data hygiene and improving outcomes in negotiations and renewals. By tackling contract data management, IT procurement will be better equipped to drive value and achieve consistent results.

IT procurement by 2030 will be a transformed discipline – one that is no longer limited to cost management but is instead a strategic engine at the core of business success. As these five trends unfold, procurement teams will wield greater influence over technology decisions, deploy cutting-edge tools, and rely on AI-driven insights to drive smarter, faster, and more impactful sourcing strategies. Organizations that embrace this evolution will find themselves more agile and resilient, with procurement as a vital partner in their journey toward a digitally-enabled future.

Want to learn more about the future of IT sourcing? Download our ebook, IT Procurement 2030 – Preparing for a New Era of IT Sourcing.

With the vendor’s fiscal year-end quickly approaching (Jan. 31), many enterprise customers are staring down a Salesforce negotiation for a renewal or new purchase. These transactions can be ground zero for overspending with long-tail impacts on IT budgets and software asset management hygiene.

Most enterprise-scale Salesforce deployments have grown exponentially over the years. The vendor is highly skilled at expanding its footprint across multiple business units and departments, making it hard for customers to have a clear picture of what they own.

Furthermore, customers rarely validate renewal requirements based on actual usage. They simply renew what they have and buy more. Inevitably, customers end up with bloated Salesforce estates and costs that grow exponentially from renewal to renewal.

Another risk inherent in Salesforce negotiations? Software license audits.

Salesforce Software License Audit Risks

Historically, noncompliance hasn’t been an issue for SaaS deployments because the concept of over-deployment doesn’t really apply – users can’t be enabled if you don’t have a paid license. But as SaaS vendors’ solution portfolios become more complex, there’s a new wrinkle: product use rights. At NPI, we’re starting to see enterprise SaaS vendors auditing customers to discern if software is being used according to online service terms. And just like software license audits of perpetual license deployments, SaaS vendors are using audits to “motivate” customers to migrate to newer solutions so they increase lock-in and revenues.

In Salesforce’s case, there are two main areas where the vendor can audit you:

1. Restricted Use Licenses: The onus of compliance is on the customer to monitor and adhere to terms of restricted use listed on their order form. Common pitfalls that lead to noncompliance exposure are misconfiguring or failure of IT procurement to communicate restricted use terms to IT (these terms are often accepted in exchange for more attractive discounting). Out-of-compliance licenses are typically subject to the difference between the quoted price and the then-current list price. That’s a substantial cost jump for most customers!
2. Consumption-based Marketing Products: For these products, customers typically estimate usage and pay accordingly. While some customers negotiate overage rates, Salesforce has historically been pretty flexible and allowed customers to re-up with a new order when consumption limits are reached. If overage rates have not been negotiated (or well negotiated), the cost implications can be quite high. Salesforce is under intense pressure to boost revenue, making it more likely the vendor will start charging overages that could be 125 to 150% of a customer’s base price.

Salesforce Negotiation Best Practices

Here are three things Salesforce customers should do to prepare for their next Salesforce renewal or purchase. These actions have the potential to save enterprise customers millions of dollars.

Assess Actual Usage to Identify Opportunities to Right-size or Liberate Licenses

A license optimization assessment is the crucial first step in cutting risk and eliminating cost waste in your Salesforce environment. It provides a detailed analysis that identifies specific individual licenses that can be terminated or repurposed, helping you avoid unnecessary new purchases. Cost savings usually emerge in two key areas:

• Rightsizing license assignments: Instead of defaulting to a standard license, you can find opportunities to assign more cost-effective options tailored to users’ actual needs.
• Freeing up license currency: By analyzing usage data, you can identify inactive licenses—whether it’s no-pulse users like printers, former employees, or users with multiple active licenses—and either cancel or redeploy them.

Get Your Compliance House in Order Before Negotiating with Salesforce

Getting your compliance house in order is crucial for Salesforce customers to avoid unexpected costs and headaches. Ensure consumption-based products are being used properly. Conduct an internal audit to make sure usage is in accordance with restricted use terms. Don’t forget to negotiate overage rates in your next agreement. You’ll be glad you did if/when they’re ever triggered!

Optimize All Aspects of Your Salesforce Agreement

With a fact-based usage baseline in hand, it’s time to tailor your Salesforce renewal to match your actual needs. What licensing mix aligns with your verified usage and future demand projections? How will different licensing scenarios impact costs? Which strategy best supports your technical and business goals throughout the full term of the agreement? Answering these questions ensures you only pay for what you need while choosing the right licenses for your users and business model.

Another key step is minimizing cost risks over the agreement’s term. Start by conducting an IT price benchmark analysis to confirm that your pricing and discounts are at or below fair market rates for each component of your renewal. Don’t forget to optimize business terms like compliance, SLAs, and data ownership to prevent unnecessary costs down the line.

Interested in reducing cost and risk during your next Salesforce negotiation? NPI’s Salesforce cost optimization experts can help. Contact us.

Achieving the best outcomes in IT purchasing doesn’t begin when the vendor sends a quote. It starts well before that. There’s no end in sight to the upward trajectory of enterprise IT spend. It’s more critical than ever for organizations to focus on purchase optimization early in the IT buying process to eliminate overspending in this complex category and to speed up procurement cycles so you get to the business benefit faster.

High-performing IT procurement teams know that success requires much earlier involvement. By adopting a proactive “T-minus X” approach, where “X” is the preparation time needed for optimal results, IT sourcing teams can significantly improve their negotiation outcomes. Keep in mind that many enterprise IT vendors have their own T-minus X playbooks and strategies – they start working on ways to extract more revenue at your next renewal before the ink is dry on the last contract.

Here’s a roadmap for identifying optimization and savings opportunities at each stage of the procurement process:

Maintain Full Visibility into What You Own, Key Dates, and Commercial Terms

Start by maintaining clear visibility into your current IT assets, key contract dates, and critical commercial terms.

Deal-specific:  Once business and technical needs are identified, procurement should review the IT portfolio for duplicate or competitive solutions. If alternatives are found, field competitive quotes to maximize existing discounts. This creates competitive pressure, encouraging non-incumbent vendors to offer better pricing and terms.

Process-oriented: Visibility helps prioritize purchases and renewals based on their urgency, complexity, and deadlines. Allocating resources efficiently ensures enough time for thorough planning and execution.

Conduct Vendor-Specific Research and Preparation

Preparation time for negotiations varies by vendor and transaction complexity. Gather intelligence on the vendor’s historical pricing flexibility, incentives, SKUs, and business dynamics that might influence their negotiation behavior.

Use the insights from your vendor research to shape your sourcing strategy. Do you move forward with the current vendor, or are there better alternatives? If you stick with the vendor, leverage your research to negotiate a stronger initial quote.

Stay Updated with Supplier Briefing

Throughout the purchasing process, monitor changes in the vendor’s business and the competitive landscape. These shifts can offer leverage points during negotiations, helping you secure better terms.

Analyze Vendor Quotes Thoroughly

When you receive a vendor quote, carefully review it to ensure that it meets your business, usage, and technical requirements. Look out for unfavorable terms and conditions that might signal potential issues.

Benchmark and Develop a Negotiation Strategy

Conduct price benchmark analysis, comparing the vendor’s quote to peer purchases with similar scope. This ensures you’re getting best-in-class pricing and terms. Set clear negotiation targets and align stakeholders around those goals. Use the latest vendor intelligence to inform your negotiation strategy.

Finalize the Deal and Plan for the Future

Once you’ve secured an optimized deal, use the insights gained from this purchase cycle to prepare for the next one. Establish your “T-minus” timeline for future renewals and document key details in your tracking system to ensure continuous optimization. Remember – it’s an ongoing cyclical process, not a one-time event!

Start Early, Save Big, at Speed

By starting the procurement process early and leveraging vendor-specific intelligence, IT buyers can optimize outcomes and secure favorable deals with confidence, reducing cycle time and helping the business drive technology initiatives forward. Proactive preparation is key to long-term success in IT purchasing.

To learn more about the next generation of IT purchase optimization strategies and tactics, download your free copy of IT Procurement 2030: Preparing for a New Era of IT Sourcing. Or contact NPI to learn how we can help you optimize your enterprise IT purchase and renewals.