Webinars Preparing for Your Next Adobe Negotiation: What’s Changed in Adobe Pricing, Packaging, and Commercial Strategy Adobe Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. Adobe customers are facing a rapidly changing commercial landscape driven by AI bundling, forced product migrations, evolving licensing structures, and increasingly aggressive pricing strategies. Whether you’re evaluating a new Adobe investment, managing an existing ETLA, or preparing for a future renewal, understanding where the leverage is has become significantly more complicated. Join NPI for a practical discussion on the market trends, negotiation dynamics, and optimization strategies enterprise sourcing teams are using to control costs and make smarter Adobe decisions. What You’ll Learn: How Adobe’s evolving packaging and AI-driven product strategy is changing enterprise costs and licensing complexity Where customers are seeing the biggest pricing increases across ETLAs, Acrobat, Creative Cloud, and Experience Cloud The negotiation tactics Adobe is using today, including bundling, forced upgrades, usage-based pricing models, and compressed negotiation timelines How sourcing teams are evaluating alternatives, structuring commercial protections, and improving leverage in Adobe negotiations Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.
Webinars The New Cisco Negotiation Environment: Deal Optimization Strategies That Actually Deliver Cisco Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. Cisco customers are entering a very different buying environment than they were even a few years ago. Preparation and a clear direction for where optimization will drive meaningful ROI is essential. In this session, NPI will break down the latest Cisco pricing and negotiation trends, where sourcing teams are successfully creating leverage, pitfalls to avoid, and useful tips for optimizing your next Cisco purchase or renewal. What You’ll Learn: The market dynamics and pricing/licensing changes having the biggest impact on enterprise spend right now Where competitive pressure in networking, security, and collaboration is creating new leverage opportunities The most important areas of optimization that will reduce cost and risk across your Cisco estate The negotiation and optimization strategies that are driving better deal outcomes in today’s Cisco deals Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.
Blog AI Spend is Outrunning Procurement. Here’s What Sourcing Leaders Are Actually Doing About It. May 7, 2026AI Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. When we asked 89 IT sourcing leaders from large enterprises what their biggest AI spend challenge is right now, 56% picked the same thing: unpredictable usage and scaling costs. The other four options barely registered. That kind of consensus is unusual in a room full of procurement people, and it tells you something. The category isn’t behaving the way enterprise software is supposed to behave, and the people responsible for buying it know it. We hosted this “peer connect” on the back of NPI’s most recent Client Advisory Board meeting, where directors and CPOs from major brands made it clear they wanted us to bring the conversation downstream. The CAB had spent its time on AI cost governance (what’s working, what isn’t, what the next twelve months look like) and the practitioners actually managing these contracts deserved the same forum. The response to the invite told us the demand was real. So did the polls. Tokenomics and the SaaSpocalypse We’ve been discussing the SaaSpocalypse at length here at NPI — the steady deflation in SaaS valuations and how customers are shifting away from buying narrow point solutions in favor of building AI-driven workflows in-house. That’s the macro. The micro is what’s keeping sourcing teams up at night: the move from per-seat pricing, which we all knew how to negotiate, to consumption- and token-based models, which most IT procurement playbooks were not built for. Tokens. Credits. Multipliers that change by model. Vendors who define a “credit” one way in the order form and another way in the documentation. Bundling that buries AI features inside existing renewals and quietly raises the price of the bundle. None of this is new in spirit — software vendors have always optimized monetization — but the speed and opacity of the shift is new. You can’t forecast what you can’t predict, and you can’t govern what you can’t see. Half of Large Enterprises Have an AI Center of Excellence. Half Do Not. The cleanest split of the day came on the AI Center of Excellence question: a 50/50 break. We’ve talked to organizations on both sides of this and the honest read is that having a CoE is not, by itself, the answer. What our CAB members emphasized, and what the breakouts reinforced, is that even companies with dedicated AI roles often don’t have a coherent AI strategy. The org chart is ahead of the operating model. What does seem to work, regardless of whether it lives inside a formal CoE is treat tokens and credits as an internal budget. Allocate them to business units. Make people request more when they run out. That single change does more for cost discipline than any vendor-side negotiation, because it forces the organization to confront its own consumption patterns before the invoice does. Looking Ahead: Where AI Cost Pressure Will Come From in the Next 12 Months The third poll was the most interesting because it was the most distributed. Token and API usage growth led at 27%, but new vendor pricing changes (23%), more employees using AI tools (22%), and expanding AI into production workflows (19%) were all clustered behind it. It’s clear there is no single dominant pressure. There are four of them, and they’re all happening at once. That’s the part to pay attention to. It’s tempting to build a cost program around one of these (say, employee adoption) and assume the rest will follow. The organizations who are furthest along are running parallel tracks: usage governance for what’s already deployed, contract strategy for what’s renewing, vendor diligence for what’s coming next. They’re not picking one! Emerging Best Practices From Deep Within the Trenches A few patterns surfaced across our breakout sessions that are worth flagging because they aren’t in the standard procurement deck yet. Pilot-first, with shorter terms. The pattern emerging is one-year renewals on AI tooling — sometimes shorter — specifically because the underlying technology and pricing are moving too fast to commit to three-year deals. Procurement is trading discount depth for optionality, and on AI right now, that’s the right trade. Super caps and price-change clauses. Several organizations are negotiating contractual ceilings on consumption-based pricing and explicit clauses governing how vendors can redefine credits or change token multipliers mid-term. If you haven’t asked for this language yet, ask. The vendors who push back on it are telling you something. Forward deployed engineers as a hidden line item. One of the more underappreciated cost drivers came up in a breakout session: the professional services attached to AI deployments (particularly forward deployed engineers from the model providers themselves) are scarce, expensive, and often not modeled into TCO. If a vendor is offering FDE time as part of a package, find out what it’s actually worth. It’s frequently the most valuable thing in the contract. Data, training, and the quiet legal exposure. Breakouts raised real concern about what happens when proprietary data ends up in training sets, intentionally or otherwise. Most organizations do not yet have policies specific enough to be enforceable. The procurement contribution here isn’t writing the policy; it’s making sure the contract language reflects whatever policy legal lands on. ROI measurement remains the unsolved problem. Discussions revealed that most organizations are tracking spend under management on AI just fine. Attributing productivity gains or savings back to those investments is much harder. We don’t have a clean answer either, and we’d be skeptical of anyone who claims they do. The honest version: ROI on AI right now is a portfolio conversation, not a per-tool conversation, and the procurement teams getting traction are the ones helping their finance counterparts frame it that way. Where We Go From Here Several of our clients have asked us where this conversation goes next. That’s part of why we’ve launched Atrium, NPI’s peer community built specifically for practitioners working on these problems. The format is peer learning and one-to-one connections with people who have already solved (or at least wrestled with) a specific challenge, whether that’s contract language, governance design, or how to talk to the CFO about consumption-based forecasting. The challenges surrounding AI cost governance won’t settle down in the next twelve months. In all likelihood, they’ll become more problematic. Vendors will keep moving. Pricing models will keep shifting. The organizations that come out of this period in the best shape will be the ones whose procurement teams treat AI cost management as a formal discipline under build. We’re here to help, and this conversation will continue across webinars, NPI Summits, and virtual meetings within our Atrium peer community. If you’re interested in learning more about Atrium, contact us. Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.
Bulletin Turning Oracle Pressure Into Negotiation Leverage Apr 29, 2026 Download PDF Download My Copy Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. Oracle runs one of the most sophisticated enterprise software sales operations in the market. Compliance pressure, support pricing, fiscal calendar urgency, and cloud bundling are engineered to extract maximum spend from every renewal. This bulletin shows procurement and IT leaders how to reclaim control, reframe the commercial conversation, and negotiate outcomes that reflect actual market value. The Oracle Commercial Landscape Today A PLATFORM BUILT FOR LOCK-IN Over four decades, Oracle has systematically expanded from its relational database roots into cloud infrastructure, business applications, and platform middleware. Today the vendor is mission-critical for most large enterprises across ERP, database, Java runtime, and cloud services – a footprint that creates three compounding procurement challenges: Compliance risk exposure: Oracle’s license metric complexity and LMS audit infrastructure mean most enterprises carry unresolved compliance risk at any given time. Support dependency: Annual support at ~22% of net license value with compounding 8% renewal uplifts creates structural cost growth that is rarely challenged. Stakeholder fragmentation: IT, finance, legal, and business units hold independent relationships with Oracle account teams. This is misalignment that Oracle actively exploits. FOUR COMMERCIAL TACTICS RESHAPING RENEWALS Procurement leaders must understand four structural features of Oracle’s commercial model: 1. Artificial Deadline Pressure Oracle manufactures urgency around four fiscal quarter-ends: January 31, February 28, May 31, and August 31. “Approval windows closing Friday/this quarter” are a scripted tactic. 2. Bundle Discounts and Shelfware Oracle bundles ERP, HCM, database, and cloud products with large headline discounts. Shelfware commitments inflate the baseline for every future renewal. 3. License Compliance Audits as Sales Tools Oracle’s License Management Services (LMS) audit function is deployed ahead of renewals to create compliance anxiety that accelerates deal timelines. Audit frequency correlates with Oracle’s fiscal calendar, not independent audit triggers. 4. Cloud and AI Bundling Pressure OCI and Fusion SaaS are aggressively positioned as part of every renewal. AI features are gated behind premium service tiers, mirroring tier-upgrade pressure seen across the enterprise software market. Enterprises that succeed in Oracle negotiations are those that understand Oracle’s incentive structure better than Oracle’s account team understands theirs.Oracle’s account teams arrive at every renewal with detailed consumption data, a staged discount approval hierarchy, and a clear upsell roadmap. Procurement teams that are unprepared cede the information advantage before the conversation begins.The organizations that succeed in Oracle negotiations start early, own their data independently, and approach the conversation with a unified internal front. Where Enterprises Are Overpaying Understanding where spend leaks occur is a prerequisite to effective negotiation. NPI’s analysis of enterprise Oracle contracts identifies four primary overpayment vectors: SUPPORT COST INFLATION Oracle’s standard support runs ~22% of net license fees annually, with a default 8% renewal uplift. Most organizations accept this structure without challenge. Procurement teams that negotiate multi year price holds or reference third-party support (TPS) pricing materially reduce their total Oracle cost basis. TPS providers including Rimini Street and Spinnaker Support price at around 50% (or higher) of Oracle Premier Support. JAVA SE PER-EMPLOYEE PRICING Oracle’s January 2023 shift to per-employee Java SE licensing created material cost exposure for enterprises with large headcounts and legacy Java deployments. Organizations that previously paid per-processor or per-named-user now face costs 3-5x higher on a like-for-like basis. Viable migration paths to tools like Amazon Corretto and Red Hat OpenJDK exist for non-commercial Java workloads. SHELFWARE AND OVER-LICENSING Oracle’s bundle discount model creates strong incentives to contract for products that are never fully deployed. Every unused license removed before renewal cannot be cited by Oracle to justify price increases – and creates a direct credit-generating concession opportunity. The prior year’s invoice is a ceiling, not a floor. CLOUD BUNDLE COMMITMENTS AND AI UPSELLS OCI credits negotiated as part of on-premise renewal bundles frequently go underutilized. Simultaneously, Fusion SaaS contracts increasingly include AI feature tiers which may result in future nonforecasted costs. Procurement teams that accept compounding uplift clauses in multi-year Fusion terms embed structural cost growth that is difficult to reverse at subsequent renewals. Pre-Renewal Preparation: The Five Imperatives Regardless of where an organization sits in its Oracle renewal timeline, the following preparation disciplines are non-negotiable for achieving a defensible negotiation outcome: IMPERATIVE 1 Start 6-12 Months Before Renewal 6 to 12 months prior to renewal is the minimum effective preparation window. Starting earlier allows procurement to leverage Oracle’s own incentive structures (early renewal credits and scope concessions) in the customer’s favor, rather than reacting to Oracle’s timeline. Late engagement eliminates leverage and invites auto-renewal at full price. IMPERATIVE 2 Own Your License and Deployment Data First Conduct an independent license position analysis before engaging Oracle. Confirm deployed products, actual user counts, and license metrics against deployment reality. Do not rely on Oracle’s LMS data. It reflects Oracle’s commercial interests, not your actual compliance posture. IMPERATIVE 3 Build Your Bill of Materials from Actual Usage, Not Last Year’s Invoice Interview business owners for every Oracle product in your estate. Any SKU without a named accountable owner and an attached use case should not appear in the renewal. Eliminate shelfware before Oracle can use it as a baseline justification for price increases. IMPERATIVE 4 Benchmark Against Fair Market Value SKU-level peer pricing data provides a factual counterpoint to Oracle’s proposals. Without benchmark data, procurement teams negotiate from a position of information asymmetry. Oracle’s team arrives with your transaction history; you need independent market data to counter with credibility. IMPERATIVE 5 Align Internal Stakeholders Before Engaging Oracle Designate a single internal Oracle relationship owner. All communications route through that person. Oracle account teams are skilled at identifying the path of least resistance through an organization. A unified internal front with clear walk-away points is one of the most powerful negotiation tools available. Shelfware is the structural liability of Oracle cost management.Every unused Oracle license removed before renewal is one that cannot be cited by Oracle to justify price increases. It also creates a direct credit-generating concession opportunity.Oracle’s account teams know your contracted footprint. The negotiation begins with who understands actual deployment reality better. Specific Negotiation Guidance ON ORACLE SUPPORT PRICING Challenge the default 8% uplift. Request a multi-year price hold or flat renewal in exchange for early commitment. Oracle will concede on uplift before conceding on base pricing. Obtain a formal written TPS proposal. A documented ~50% (or higher) cost alternative shifts Oracle’s position materially, even if you never switch. Separate support renewal conversations from any concurrent LMS audit activity. They are legally and commercially distinct processes. ON JAVA SE Conduct a full Java discovery. Identify every system running Oracle JDK, confirm version, and assess migration viability to OpenJDK alternatives before negotiating. Calculate full compliance cost exposure under the per-employee model. That delta is your negotiating floor. Oracle only discounts when migration is a credible, documented threat. Build a migration plan with timeline, resources, and proof-of- concept. Vague migration threats are ignored; documented plans move Oracle’s position. ON OCI AND CLOUD DEALS Never accept Oracle’s first quote. Counter every OCI proposal with AWS/Azure equivalents and formal written competitive quotes. Back-of-envelope estimates are useless. Negotiate annual flex credits. Do not accept use-it-or-lose-it OCI credit structures. Request a ramp structure for multi-year Universal Credits commitments. Lower in years 1-2, escalating only after confirmed adoption. ON FUSION SAAS CONTRACTS Lock in user count flexibility for the contract term. Start conservative and negotiate a right to add users at the agreed price, not Oracle’s future list price. Lock in future module pricing at contract signing. Years 2-3 pricing not contractually fixed will be held against you at renewal. Negotiate go-live protections: standard support fees should not begin until deployment is confirmed if Oracle delays your go-live. ON ULAS (UNLIMITED LICENSE AGREEMENTS) Do not enter a ULA unless Oracle deployments are growing rapidly across multiple products. A ULA benefits Oracle in stable or declining footprint environments. Run LMS scripts 6-12 months before term end to establish your own certified count baseline before Oracle’s team does. If you certify, be aware that the Oracle ULA standard terms establish that post-term annual support fees cannot be less than the support fee paid immediately prior to ULA expiration. After certification, you can then begin the process of potentially right-sizing downward Oracle support to match your current utilization. The strongest Oracle deal outcomes aren’t negotiated at the table.They’re built months in advance through disciplined preparation, independent data ownership, internal alignment, and benchmarkbacked insight.Oracle negotiates for a living. The organizations that win are those that match Oracle’s commercial preparation with their own. Turning Preparation Into Negotiation Power Oracle’s commercial sophistication has grown in direct proportion to its product depth. The vendor arrives at every renewal conversation with detailed consumption data, a staged discount-approval hierarchy, a clear upsell roadmap, and a team of account professionals trained to identify and exploit internal misalignment on the customer side. Achieving favorable outcomes in Oracle deal negotiations isn’t limited to the largest customers with the most perceived leverage. It’s for organizations that start early, own their data independently, align internally before engaging externally, and approach the commercial conversation with benchmark-supported, use-case-validated positions. The most powerful lever in any Oracle negotiation isn’t the size of your contract – it’s the quality of your preparation. Oracle’s account teams operate on tight timelines and quota pressure. A wellprepared procurement team that controls its own data, has documented alternatives, and presents a unified internal front consistently outperforms unprepared teams regardless of deal size. Download PDF Download My Copy Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.
Blog Salesforce Just Made the “Own Your AI Layer” Argument a Lot Harder to Ignore Apr 22, 2026AI, Salesforce Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. We have been having the same conversation with nearly every client over the past few months. It goes something like this: “Who owns your AI orchestration layer? Do your own agents orchestrate across your systems of record, or does each vendor own that layer and bill you separately for the privilege?” Many CIOs and procurement leaders are considering a departure from the norm: own it yourself. One AI bill instead of many. No lock-in to a single vendor’s agent stack. Full visibility into what your agents are actually doing and what it costs. There are many unknowns regarding the work involved to execute this approach, but there is definitive interest (if not momentum) behind the notion. This week, Salesforce made that path significantly more credible. They’ve also raised several questions that will test the viability of owning your own orchestration layer. What Salesforce Actually Announced At its TDX 2026 developer conference in San Francisco, Salesforce launched Headless 360. The short version: they have exposed their entire platform as APIs, MCP tools, and CLI commands so that AI agents can operate Salesforce completely without a browser or a human login. Your Claude agents. Your ChatGPT agents. Your own orchestration layer. They can now call directly into 25 years of Salesforce data, workflows, and business logic without Agentforce as the middleman. The release ships over 100 new tools immediately, including more than 60 MCP tools and 30 preconfigured coding skills. Salesforce also released Agent Script, an open-source language for defining agent behavior deterministically, which signals that they are serious about making this infrastructure-grade rather than demo-grade. This is arguably the most important move a large enterprise SaaS provider has made in the AI era, and an indication of what’s to come. Salesforce is doing more than simply building agents on top of their platform and selling you access to those agents. They are making the platform itself available to whatever agent runtime you choose to run. Why This Matters for the “Own Your Layer” Debate The core tension in enterprise AI right now is this: every major SaaS vendor is simultaneously building agents and positioning their agent platform as the coordination layer across the enterprise. If you let that happen, you end up with five different agent layers, five different pricing models, and no unified view of what any of it costs. The alternative, which is gaining real consideration in some companies, is building or designating your own orchestration layer and having your agents call into vendor systems via APIs rather than running inside each vendor’s walled garden. Until recently, Salesforce was a hard platform to adopt this approach with. The depth of workflow logic, process automation, and customer data inside most Salesforce implementations made it difficult to run meaningful agent workflows against the platform without going through Agentforce. Headless 360 could change that. It is not a workaround. It is Salesforce explicitly opening the infrastructure to external agents. The Catch Nobody Is Talking About: Consumption Pricing Sound too good to be true? Possibly. As companies debate the feasibility of “own your own orchestration layer,” they need insight into two things: At what cost? How do we predict and manage these costs? Salesforce has not announced how Headless 360 will be priced. But we can expect premium, consumption-driven pricing once SKUs appear. It will likely be tied to Agentforce and Data 360 usage rather than traditional seat licenses as Salesforce finds a way to meter and charge for access. Salesforce has already shifted its Agentforce pricing from per-seat licenses to consumption-based billing. That shift reflects an AI reality: when agents are doing the work, seats are the wrong unit. But consumption pricing pushes the visibility problem entirely onto the buyer. When humans consumed software, you forecasted seats. When agents consume it, you are forecasting token burn rates across workflows that do not behave the same way twice. (at least for right now – the repeatability factor is improving with every iteration). Now imagine five platforms with consumption models and your own agents calling into all of them autonomously. If you do not own the intelligence infrastructure to govern that spend, you have traded vendor lock-in for vendor chaos. When we sit down with clients on this question, we talk through two paths: Path A: Rely on each vendor’s agent layer. Each platform (Salesforce, ServiceNow, Workday, Microsoft, etc.) orchestrates within its own domain. You get faster time-to-value within each system but no unified orchestration, no consolidated cost visibility, and a bill from each vendor’s agent platform on top of your existing license spend. Path B: Own your orchestration layer. You run a central agent runtime, you call into each platform via APIs, and you maintain visibility and control over what agents are doing and what it costs. Much like the traditional buy versus build debate, there is higher upfront investment in architecture (although this cost is becoming cheaper for teams that know how to effectively wield AI coding tools). The byproducts? A significantly better position at renewal time and in managing total AI spend. The pattern we are seeing is that organizations considering Path B are doing it not because they have a fully formed strategy, but because the math on Path A is getting difficult to defend to the CFO. What NPI Is Advising Right Now Headless 360 is fresh to market and there is still a lot to be evaluated (pricing being an obvious example). But it’s worth a serious look for any organization where Salesforce is a core system of record and where you are already building or planning to build agents. Before you move, get clear on three things: Your consumption baseline. What does your current Salesforce spend look like in terms of API consumption, automation runs, and Agentforce credits? If you do not have that number, you are not ready to let agents run autonomously against the platform. Your contract terms. Consumption pricing with credit multiplier provisions is not the same as fixed-rate API access. Know exactly what triggers cost increases and where your protections are. Your governance layer. Owning your AI orchestration layer will only be an advantage if you can see what it is doing. That means logging, cost attribution, anomaly detection, and workflow-level spend visibility across every system your agents touch. Salesforce has made the platform available. Whether you can take advantage of it in a way that is actually sustainable comes down to whether your own house is in order first. NPI helps enterprise technology buyers optimize AI spend. Interested in a conversation? Contact us. Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.
Bulletin How to Beat ServiceNow at the Negotiation Table in 2026 Apr 6, 2026ServiceNow Download PDF Download My Copy Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. ServiceNow knows it’s a top-five vendor and it’s pricing like it. Forced migrations, AI bundling, tier pressure, and compounding uplifts are making renewals harder and more expensive. This bulletin shows procurement leaders how to push back, regain leverage, and negotiate outcomes that reflect real value. The ServiceNow Commercial Landscape Today A PLATFORM BUILT FOR STICKINESSOver the past decade, ServiceNow has systematically expandedfrom its IT Service Management roots into Risk, HR, InfoSec, andFinance. Today, the vendor is operationally indispensable for theenterprises it serves. This expansion has created three compoundingprocurement challenges: Stakeholder fragmentation: Multiple functional owners now sit at the table, each with independent relationships with ServiceNow account teams and divergent priorities. Increased platform stickiness: The deeper the deployment, the harder it becomes to negotiate credibly from an alternative-vendor position. License metric complexity: Shifting bundle structures and SKU proliferation create confusion (and compliance risk) for organizations without a dedicated Software Asset Management function. The organizations that will succeed in 2026 ServiceNow negotiations are those that start early, own their data, and approach the vendor with a unified internal front. FOUR CRITICAL CHANGES RESHAPING RENEWALS Procurement leaders must understand and prepare for four structural shifts in ServiceNow’s commercial model: Forced Migrations & Sunset MandatesIntegrationHub and Automation Engine are transitioning to the Workflow Data Fabric model. Simultaneously, Software Asset Management SKUs are migrating from per-device to a Subscription Unit model. These changes introduce both pricing uncertainty and negotiation urgency that ServiceNow account teams are prepared to use as leverage. The Tier Upgrade Push: Pro Plus & Enterprise Plus ServiceNow’s generative AI capabilities (Now Assist) are gated behind Pro Plus and Enterprise Plus tiers. Upgrading to these tiers represents a 30 to 60% increase in per-user cost. ServiceNow account teams are applying sustained pressure to move customers up, often framing the upgrade as a business-critical evolution. Impact Support Tier ChangesImpact Advanced support is no longer offered in 2026. Impact Guided and Impact Total are alternatives, with many customers being forced to move to the costlier Impact Total. This shift is often presented as a service improvement rather than a price increase. Pricing UpliftsUnit prices are increasing 8 to 12% even for customers with growing license volumes. More significantly, renewal contracts are increasingly including 3% compounding annual uplift clauses. That generates a cumulative 9%+ cost increase over a standard three-year term on the exact same license footprint. Where Enterprises Are Overpaying Understanding where spend leaks occur is a prerequisite to effective negotiation. NPI’s analysis of enterprise ServiceNow contracts identifies four primary overpayment vectors: ANNUAL UPLIFT CLAUSESServiceNow’s historical pattern was to propose 15 to 25% renewal increases and negotiate to approximately 10%. This is currently being replaced by contractual 3% compounding uplift clauses, which may appear modest but accumulate significantly across multi-year terms. Procurement teams that accept these clauses without challenge are embedding structural cost growth into their contracts. THE “APPROVER TAX”: BUSINESS STAKEHOLDER LICENSESManagers and approvers who access ServiceNow for reporting, approvals, or workflow participation carry separate license costs. These are frequently added during deployment by IT and functional teams without commercial oversight. The result? Unaccounted spend in the procurement baseline that compounds with every renewal. SHELFWARE: LICENSES PAID FOR, BUT NOT USEDIndustry data suggests that 90% of ServiceNow deployments capture only approximately 30% of their contracted value. Shelfware is not the exception; it is the norm. This creates both a financial exposure and, paradoxically, a negotiation opportunity. Every unused license removed before renewal is one that cannot be cited by the vendor to justify price increases. THE OVER-CONSUMPTION NARRATIVE AND NOW ASSIST OVERAGESServiceNow account teams frequently present “enabled” assets as compliance risk, framing the conversation around what the customer could owe, rather than what is actually deployed. Enabled does not mean actively used. Procurement teams must challenge this framing with independent consumption data. Now Assist (ServiceNow’s generative AI suite) introduces a new overage risk. AI usage grew 9x in H1 2025 alone, quickly outpacing the annual Assist allotments bundled into Pro Plus and Enterprise Plus licenses. Overage costs are not transparently priced. Organizations may accumulate millions of dollars in AI credit exposure without visibility until the next renewal cycle. Pre-Renewal Preparation: The Five Imperatives Regardless of where an organization sits in its renewal timeline, the following preparation disciplines are non-negotiable for achieving a defensible negotiation outcome: IMPERATIVE 1Start Earlier Than You Think9 to 12 months prior to renewal is the minimum effective preparation window. 18 to 24 months is optimal, as it allows procurement to leverage ServiceNow’s own incentive structures (e.g. early renewal credits and expanded scope concessions) in the customer’s favor. IMPERATIVE 2Own Your Consumption Data FirstConduct an independent consumption and optimization assessment before engaging ServiceNow. Identify shelfware, inactive users, and enabled-but-unused assets. Do not rely on ServiceNow’s reports. Their data reflects what serves their commercial interests. IMPERATIVE 3Build Your Bill of Materials from Demand, Not Last Year’s Invoice Interview functional product owners for each ServiceNow module. Any SKU without an attached use case and an accountable business owner should not appear in the renewal. The prior year’s invoice is a ceiling, not a floor. IMPERATIVE 4Benchmark Against Fair Market ValueSKU-level peer pricing data provides a factual counterpoint to vendor proposals. Without benchmark data, procurement teams are negotiating from a position of information asymmetry. IMPERATIVE 5Align Internal Stakeholders Before Engaging the VendorServiceNow account teams are highly skilled at identifying the path of least resistance through an organization. The functional leader who wants AI features, the IT executive who values the relationship, the manager who is behind on deployment. A unified internal front, with a clear communications guide for all stakeholders, is one of the most powerful leverage tools available. Shelfware is the flagrant foul of ServiceNow cost management. Every unused license removed before renewal is one that cannot be cited by the vendor to justify price increases. Specific Negotiation Guidance ON NOW ASSIST AND AI TIER UPGRADES Do not upgrade to Pro Plus or Enterprise Plus under time pressure. Understand the full consumption model before committing to a tier change, specifically the number of Assists included per license, per-pack overage cost, and consumption caps. Require order form language that explicitly specifies: (1) Assists included per license annually, (2) per-pack overage cost in writing, and (3) a contractual consumption cap with notification obligations before overages accrue. Treat AI credits like any other consumption-based resource: model expected usage, apply appropriate buffers, and negotiate overage pricing before signing. ON ANNUAL UPLIFT CLAUSES Challenge 3% compounding clauses explicitly. Request flat-rate uplift caps or, for large-volume renewals, negotiate uplift-free terms in exchange for multi-year commitment. If a compounding clause cannot be removed, negotiate an explicit base-year definition to prevent retroactive application. ON IMPACT SUPPORT CHANGES Request a detailed side-by-side comparison of Impact Advanced (discontinued) vs. the proposed replacement tier, including SLA differences, staffing models, and response time commitments. If the support migration represents a material cost increase, treat it as a pricing concession opportunity in the broader renewal negotiation. ON LICENSE OPTIMIZATION Complete a full SKU deployment reconciliation before the renewal window opens. Any licensed SKUs with zero or near-zero active deployment should be removed from the renewal or used as credit-generating concessions. Segregate “enabled” from “actively deployed” in all internal reporting. Never accept ServiceNow’s compliance risk narrative without validating it against independent consumption data. Time pressure should not dictate ServiceNow upgrades – especially with the inclusion of AI functionality.Cost forecasting is complicated and the risk for unbudgeted spend is significant. Take time to understand cost layers, model expected usage against multiple scenarios, and negotiate overage pricing. Turning Preparation Into Negotiation Power ServiceNow’s commercial sophistication has grown in direct proportion to its platform breadth. The vendor arrives at every renewal conversation with detailed consumption data, a clear upsell roadmap, and a team of account professionals trained to identify and leverage internal misalignment on the customer side. Achieving favorable outcomes in ServiceNow deal negotiations isn’t limited to the largest customers with the most perceived leverage. It’s for the organizations that start early, own their data independently, align internally before engaging externally, and approach the commercial conversation with benchmark-supported, use-case-validated positions. The strongest ServiceNow deal outcomes aren’t negotiated at the table. They’re built months in advance through disciplined preparation, internal alignment, and independent, benchmark-backed insight. Download PDF Download My Copy Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.
Bulletin The End of Easy SaaS: How Vendor Economics Are Reshaping Enterprise Procurement Apr 1, 2026SaaS Management Download PDF Download My Copy Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. The SaaS market isn’t collapsing, but it is changing. As vendors shift from growth to margin protection through price increases, AI bundling, and more complex licensing models, procurement teams that prepare early and negotiate strategically will gain meaningful leverage. In early 2026, roughly $1 trillion was erased from software stock valuations in less than 30 days. The headlines that followed were predictable: SaaS is collapsing. The per-seat model is dead. AI is making enterprise software obsolete. That narrative is wrong, and acting on it will lead procurement leaders to the wrong conclusions. SaaS is not collapsing. Enterprise software spend is rising, projected to reach $1.4 trillion globally in 2026¹. The platforms embedded in your HR, finance, and operations infrastructure are not going away. But the commercial environment surrounding them has changed materially, and that change carries real financial risk for enterprises that are not positioned to respond. What is actually happening is a change in the economics of enterprise software. Vendors who can no longer rely on organic seat growth are recovering margin through pricing mechanisms that are more aggressive, more complex, and harder to govern than anything the market has seen in the past decade. AI is accelerating that dynamic, not causing a collapse. This is not a demand crisis. It is a leverage shift. And for disciplined procurement organizations, leverage shifts create opportunity. Market Context The End Of Easy EconomicsFor most of the past decade, SaaS growth was a function of seat expansion. Headcount grew, licenses scaled, and vendors extracted predictable, compounding revenue with relatively little friction. That flywheel has slowed. Median YoY revenue growth among publicly traded SaaS companies followed a clear downward trajectory through 2025. Revenue growth in Q1 2022 peaked at 36%, declined steadily to 19% by Q1 2024, and reached 15% by Q1 2025². By Q4 2025, analysts pegged median growth at 11 to 12%, stabilizing at this level heading into 2026³. The era of effortless expansion is behind us. This follows a familiar playbook in enterprise software. When growth moderates, rational vendors shift strategy. Instead of expanding the revenue base, they protect the margin within it. That shift is visible across the market right now. What The Selloff Actually Signaled The market event that triggered the “SaaSpocalypse” narrative was not a demand signal. It was an investor repricing of future growth expectations in light of AI. The fear is not that enterprises will stop buying software. It’s that AI will erode the per-seat pricing model that made SaaS so reliably profitable. That concern is legitimate over a multi-year horizon. But enterprise procurement leaders are operating in the present commercial environment, where the near-term risk is almost the opposite: vendors are raising prices, tightening contracts, and using AI as a justification to do both faster. What is Shifting From Expansion To EnforcementThe most consequential change in this market is behavioral. Vendors are moving from growth tactics to enforcement tactics. This shows up in predictable ways: Minimum commit floors embedded in enterprise agreements AI functionality bundled into base licenses with price uplifts attached Consumption-based overlays layered onto existing seat models Renewal timelines compressed and pricing windows tightened Soft-label audits disguised as health checks, architecture reviews, and true-up validation exercises None of this is unprecedented. These are standard behaviors in enterprise software markets when organic growth slows and margin pressure rises. The difference today is the pace and the AI dimension. AI As A Pricing Mechanism AI is not being introduced cleanly as a separate product category. Across major vendors, AI features are being embedded into existing licenses with price uplifts, bundled into renewals as non-negotiable components, and used to justify escalations that would otherwise be difficult to defend. The average SaaS price increase is running at 8.7% annually (although NPI is seeing substantially higher increases across larger software estates), meaning at least 9 cents of every IT software dollar now goes toward paying more for capabilities already owned.⁴ AI is not being introduced cleanly as a separate product category. Across major vendors, AI features are being embedded into existing licenses with price uplifts, bundled into renewals as non-negotiable components, and used to justify escalations that would otherwise be difficult to defend. The average SaaS price increase is running at 8.7% annually (although NPI is seeing substantially higher increases across larger software estates), meaning at least 9 cents of every IT software dollar now goes toward paying more for capabilities already owned. The procurement risk is compounded by pricing model complexity. Vendors are migrating from predictable per-seat structures to hybrid models that combine seat fees, consumption credits, and AI surcharges. Seventy-eight percent of IT leaders report unexpected charges from these new structures.⁵ Enterprises that accept AI bundling without separating terms are locking in cost exposure before the value case is established. The Orchestration Battle Beneath the pricing dynamic, a more strategic contest is underway. Every major SaaS vendor is positioning to be the enterprise’s AI orchestration layer: the platform through which AI connects to systems, workflows, and decisions. The vendor who controls that layer controls pricing, data access, and switching costs. Salesforce Agentforce, Microsoft Copilot, and ServiceNow’s Now Assist are good examples. An enterprise that defaults to vendor-embedded AI ends up with multiple AI bills, multiple orchestration layers, and a procurement posture that becomes harder to govern with each renewal. The architecture question – who owns your AI layer? – is now a commercial strategy question. Commercial Implications Complexity Is The Revenue EngineThe most sophisticated risk in this reset is not overt price hikes. Those are visible and negotiable. The real pressure comes from structural complexity: packaging changes that reduce modularity, cross-product bundling that obscures unit economics, and consumption models that make accurate budgeting nearly impossible. Over time, complexity erodes negotiating symmetry. Procurement loses clarity. Vendors gain structural advantage. The organizations most exposed are those managing renewals reactively, without continuous benchmarking data or a portfolio-level governance framework. Procurement’s Influence Is Rising There is a meaningful counterweight to this dynamic. CFO scrutiny of SaaS spend is creating organizational conditions in which procurement’s influence is higher than it has been in years. Budget discipline, application rationalization, and ROI accountability are now priorities that extend well beyond the sourcing team. Enterprises that move deliberately – consolidating vendor relationships, rightsizing seat counts, and treating renewals as portfolio-level events rather than isolated transactions – are better positioned to negotiate from a place of clarity. The challenge is operationalizing that discipline before the next renewal cycle begins. Strategic Response Govern The Portfolio, Not Just The Contract Renewal negotiations are a lagging indicator of procurement maturity. Organizations that wait for renewal windows to engage vendors have already ceded ground. The strategic response to this commercial environment requires earlier engagement and broader governance: Begin substantive renewal preparation 12 to 18 months in advance for strategic vendors. Enterprises with 6+ months of lead time realize significantly better commercial outcomes. Maintain continuous usage analytics. Accurate utilization data is the foundation of any negotiation. Without it, vendors control the conversation. Treat AI terms as separable. Demand independent metering, contractual spend caps, and price protections on AI components before committing to bundled arrangements. Rationalize the portfolio. The average enterprise manages over 300 applications, with large enterprises managing significantly more. Consolidation creates leverage with remaining vendors. Shift the renewal frame from usage to value. Renewals are performance reviews. The question is not whether employees are using a platform but what measurable impact that platform is delivering. The organizations that will perform best in this environment are the ones that build the governance infrastructure to negotiate from a position of sustained clarity. Key Takeaways The SaaSpocalypse narrative is misleading if it implies systemic failure. A more accurate framing is that the era of business-as-usual SaaS is over, and vendors are recalibrating their commercial models accordingly. Enterprise procurement leaders face a market where pricing is accelerating, AI bundling is obscuring true cost, and structural complexity is eroding negotiating clarity. The right response here is not urgency for its own sake. It is building the operating discipline to stay ahead of the next cycle. SaaS spend is growing. The risk is not that software goes away. The risk is that procurement organizations do not have the structure to manage what they already own. Vendor behavior is the near-term threat. Price escalation, AI surcharges, and consumption opacity require active governance. Periodic attention will not cut it. AI terms require independent treatment. Pilot pricing is not production pricing. Enterprises that conflate the two will pay for it. Procurement’s leverage is highest when data is strongest. Usage analytics, market benchmarks, and portfolio-level visibility are not nice-to-haves in this environment. The organizations that respond structurally to SaaS market changes will outperform those that respond reactively. The commercial shifts we’re seeing reward discipline, proactivity, and alignment. Procurement teams that build real operating rigor now will be the ones that control cost and leverage in the next cycle. Download PDF Download My Copy Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.