Software Contract Negotiation & Renewals Management

Start negotiating Software Licence Agreements on your terms.

Why negotiation advisory?

Knowledge is power: Gaps in your understanding can be exposed during negotiations. Go in with a clear view of your software contract terms and usage versus entitlements for successful negotiation outcomes.

Cost control: Expose hidden costs and ensure you only pay for what you need. Lower your total cost of ownership by avoiding common traps.
Operational benefits: Every negotiation is an opportunity to improve terms and conditions and enhance flexibility in software use.

Why
now?

Get ahead of the renewal cycle: Don’t just accept the standard vendor uplift. Plan ahead and use renewal time as an opportunity to renegotiate based on actual software usage so you never pay for more than you need.

Inflationary pressures: Safeguard your organisation during unfavourable economic conditions by negotiating price protection clauses and capping vendor uplifts.
Digital transformation: Planning a cloud or other migration project? Changing licensing models is an opportunity to negotiate credits for old licences and shelfware.

Why Invictus
Partners?

Proven results: We’ve saved our clients more than $825 million in enterprise software costs since 2014.The vendors won’t tell you if you’re paying too much, but we will.

Extensive experience: To truly understand software negotiations, you need to think like a vendor. We have deep knowledge of each vendor’s unique licensing models, contractual nuances, sales processes and negotiation strategies.
Vendor-agnostic: As objective advisors that do not resell, audit or implement software, we are solely focused on securing optimal contract terms and pricing for our clients.

60% don’t understand their software licensing entitlements or compliance position.
90% are under-licensed and at risk of large audit penalties.
60% are paying for unused shelfware.

“We didn’t want a generalist negotiation strategy as we can do that ourselves… Invictus Partners had people who were ex-SAP employees with the knowledge we needed and a network back into areas of the vendor.”

Tristan Coleman, IT Solutions Manager, Hydro Tasmania.

Chat to an expert

How much could you save in your next software licence agreement negotiation?

When it comes to negotiations, organisations are understandably focused on price, but not always in the right way. Many walk away believing they’ve negotiated a good deal, only to be caught out by hidden costs and tricky financial terms.

The Invictus Partners team has been around the software negotiation block enough times to know where the common cost traps lie. We can cut through the BS and help you focus on what really matters. If you know where to look, significant savings are possible.

Our experts help you avoid the five common cost traps in IT vendor contract negotiations.

3. “Buy now and save”

Vendors often offer such bargains at the end of the quarter or year. They encourage customers to buy software before it’s needed, so you can end up paying maintenance and support fees for shelfware.

1. Upfront discounts

Many organisations fall into the trap of accepting upfront percentage discounts, which almost always leads to under- and over-licensing issues, a higher total cost of ownership, and future price increases. The real cost savings are in the actual net price paid for a software licence over the life of the contract.

4. Over-licensing

There is a tendency for organisations to buy more or higher-level licences than they need to avoid compliance risk. This is an overcompensatory approach that means paying a maximum licence fee rather than a cheaper one suited to the actual usage behaviour.

2. Bundled pricing

Be wary of bundled software offers, especially those made more enticing with “free” add-ons that you will probably never use, as these increase maintenance costs without adding value. Some vendors try to raise long-term maintenance revenue by artificially bundling multiple products into a licensing deal. Always ask for item-level
pricing.

5. Support uplifts

Organisations that treat contracts as isolated instances may face the same (or higher) renewal price increases come the next purchasing round. Take note of any contractual language referencing price increases over time, and negotiate caps on annual vendor uplifts for support renewals.

1. Upfront discounts

Many organisations fall into the trap of accepting upfront percentage discounts, which almost always leads to under- and over-licensing issues, a higher total cost of ownership, and future price increases. The real cost savings are in the actual net price paid for a software license over the life of the contract.

2. Bundled pricing

Be wary of bundled software offers, especially those made more enticing with “free” add-ons that you will probably never use, as these increase maintenance costs without adding value. Some vendors try to raise long-term maintenance revenue by artificially bundling multiple products into a licensing deal. Always ask for item-level
pricing.

3. “Buy now and save”

Vendors often offer such bargains at the end of the quarter or year. They encourage customers to buy software before it’s needed, so you can end up paying maintenance and support fees for shelfware.

4. Over-licensing

There is a tendency for organisations to buy more or higher-level licences than they need to avoid compliance risk. This is an overcompensatory approach that means paying a maximum licence fee rather than a cheaper one suited to the actual usage behaviour.

5. Support uplifts

Organisations that treat contracts as isolated instances may face the same (or higher) renewal price increases come the next purchasing round. Take note of any contractual language referencing price increases over time, and negotiate caps on annual vendor uplifts for support renewals.

Our Software Contract Negotiation Consulting Service breakdown:

We can provide expert licensing advice at any point during your negotiation or re-negotiation journey. We do this in three phases, which are available as an end-to-end service, or as separate engagements.

Phase 1

Licence & Contract Review

The first and most important step in negotiation preparations is a comprehensive review of your current licensing position (usage versus entitlements) and software contracts to establish your baseline. We help you understand what is in the agreements, what is not in them, and how to use that information to your advantage in vendor negotiations.

Phase 2

Recommendations & Advisory

With an understanding of your future-state requirements, we make recommendations on additional terms, licensing models, pricing structures, and/or concessions for product and business amendments.

Our team works with you to develop a structured plan and set of desired outcomes, formulate negotiation strategies and tactics on a meeting-by-meeting basis, and prepare for likely scenarios with the vendor. We conduct rigorous cost modelling and benchmarking of commercial constructs to challenge price hikes and ensure our clients get a fair deal.

Phase 3

Contract Negotiations

Once negotiations have started, we review vendor counter-proposals and offers as they come in, and ensure you close an acceptable agreement with the best pricing and arrangements locked in.

Sick of the renewal rush? Strategic software renewals management is possible.

As long as your organisation uses software, it will continue to get renewed. But that doesn’t mean you have to continue to get screwed.

Many organisations are spending hundreds of thousands of dollars on unnecessary licence and support renewal costs. In our experience, this excess spending is due to a lack of time, a lack of insight into the software footprint, and a lack of intricate licensing and contract knowledge.

Oracle, SAP, Microsoft, and IBM are notoriously difficult to negotiate with, especially when a customer is trying to spend less or move away. While you can employ plenty of negotiation strategies and tactics, nothing is more powerful than going in with a clear understanding of your current licensing position and future software needs. Enter Software Asset Management (SAM).

SAM is key to the software licence renewal process.

Far too many organisations are unaware of the interconnectedness between SAM and software negotiations. A SAM program provides you with a 360-degree view of your IT landscape and arms you with the usage data needed to make informed decisions and expedite the renewal process.

With renewals occurring every one to three years and the potential to save hundreds of thousands – even millions – over the terms of your software contracts, it is in your best interests to get a handle on your software assets and optimise usage ahead of time.

Software renewal best practices

Base decisions on actual usage data

Insight into your licensing estate should be the basis of
every decision. Complete and reliable usage data allows you to negotiate pay-per-use licence agreements, cancel shelfware, and re-harvest licences while ensuring optimal usage and compliance.

Plan a vendor- and
deal-specific negotiation
strategy

Identify vendor- and deal-specific tactics to improve your negotiating position further. All vendors have their own contract models, discount policies, and drivers to give you a better deal. You need to know what those drivers are.

Understand the terms and conditions

Most of the opportunities to negotiate are hidden in the fine print. Tailoring the terms and conditions in your agreements can do a lot to minimise costs and financial risk, and vendors usually have more room to move in this area. Some terms we’ve negotiated for our clients include price protection, product use right concessions, and clauses to protect against accidental non-compliance.

Conduct independent analyses

Software pricing is notoriously inconsistent, which makes it hard to know if you’re getting a fair deal. Price increases can seem excessive, and the vendor might explain these in vague terms such as “inflation” or “supply chain issues”. Conducting your own cost modelling and benchmarking analyses in advance gives you the data and confidence to challenge the vendor and get to the root cause of price hikes.

Vendor-specific expertise to set you up for IT software contract negotiation success.

With clients across Europe, the Middle East, Australia, the UK, and the US, we provide Software Contract Negotiation services across all vendors and help organisations worldwide manage vendor negotiations.

Oracle Contract Negotiation

With ex-Oracle executives on our advisory team, Invictus Partners helps you understand what is in your Oracle agreements and more importantly, what is not in them, as well as providing benchmarking advice in relation to pricing and terms. We can actively participate in meetings at Oracle to negotiate the lowest costs and the best terms for your organisation, or assist in a “behind-the-scenes” capacity.

SAP Contract Negotiation

Invictus Partners’ experience in negotiations with SAP enables us to know what is an optimal compliance and commercial position based on the current state of your SAP environment. Our team comprises ex-SAP senior executives who are well-connected within SAP and have an intimate understanding of SAP sales and licensing processes. We can identify the best licensing and contractual terms for your organisation, conduct price benchmarking, and help you negotiate with SAP to achieve the desired outcomes.

Microsoft Contract Negotiation

Microsoft is notoriously difficult to negotiate with, leaving many organisations feeling powerless against them. With renewals only coming up every three years, you need to be on your game. Invictus Partners helps organisations prepare for Microsoft negotiations with a structured plan and set of desired outcomes. We identify any concession opportunity that can be negotiated with Microsoft and arm you with likely scenarios in Microsoft negotiations.

IBM Contract Negotiation

Invictus Partners can assist with IBM negotiations, either front and center or advising your team in the background. Our team includes ex-IBM senior executives with deep knowledge of IBM’s software licensing terms and experience managing IBM negotiations on both the client side and vendor side. This helps ensure your IBM negotiation strategy is well planned and effectively executed, and you secure the right outcome for your organisation.

Download our Licence Management Services datasheet

IT software license management process
Client achieves an optimal SAP negotiation outcome

Case Study

Hydro Tasmania achieves an optimal SAP negotiation outcome with Invictus Partners

The Invictus Partners difference: Software Contract Evaluation & Negotiation

Invictus Partners is on a mission to eliminate inequitable software agreements, one contract at a time. We review the myriad of idiosyncrasies, restrictions, and clauses buried in the software contracts and agreements to mitigate risk, reduce duplicate costs, and ensure the licensing contracts align with current and future needs.

Invictus Partners provides organisations with the vendor-specific and deal-specific expertise needed to negotiate the best outcome. We help organisations gain full visibility of the software they own and the T&Cs it’s governed by. We give our clients the power to enter vendor discussions with knowledge and confidence and help them choose the path for optimal business, cost, and compliance outcomes instead of the path for optimal vendor revenue outcomes.

Our team comprises ex-big software vendor senior executives who are well-networked within the vendors and who have an intimate understanding of each vendor’s unique sales, licensing, renewal, and negotiation processes. Invictus Partners’ insider knowledge, connections, and extensive expertise in enterprise software negotiation and licensing make us the right partner to achieve optimal outcomes in software contract negotiations for your organisation.

Talk to a Software Negotiation expert

Got questions about Invictus Partners Software Contract Negotiation?