Price Uplifts

What is a reduction clause?

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A reduction clause refers to a provision in a software agreement that allows customers to reduce the number of licenses or users covered by their subscription during the term of an agreement. This provides customers with flexibility to adjust their plan to meet evolving business needs, while avoiding paying for licenses or users they no longer require or needing to terminate the contract. The specific terms and requirements of a reduction clause may vary depending on the SaaS provider and the subscription agreement, for example it may be subject to a minimum number of licenses or users.

What are price uplifts?

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In the context of SaaS, price uplifts refer to an increase in the price of a software subscription. While many software providers will implement price uplifts on an annual basis, typically at the point of renewal, others may review and amend their pricing more frequently, for example on a quarterly basis. It is recommended that buyers negotiate a price uplift cap during the initial contract negotiation stage, placing a limit on the maximum amount the subscription can be increased by within a specified time period.

What is FinOps?

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FinOps refers to financial operations. In relation to cloud technology, Cloud Financial Operations is a practice that focuses on aligning cloud costs with business objectives and improving overall financial management in the cloud. When implemented correctly, it can provide you with a better understanding of your cloud spending patterns, enabling you to make more informed decisions on how to allocate and manage your costs.

What is Cloud Cost Optimization?

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Cloud cost optimization refers to the process of reducing and optimizing cloud spending, while ensuring optimal resource utilization and maintaining desired performance levels. It ultimately involves managing cloud costs without compromising business objectives or user experience.

What is meant by outsourced SaaS procurement?

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Outsourced procurement in SaaS refers to the process of hiring a third-party vendor to manage some or all aspects of a company’s procurement process. This can involve negotiating with vendors on your behalf to secure the best possible price and terms on any SaaS contract, while also refining, implementing and enforcing procurement processes that ultimately protect your business.

What is a service level agreement in SaaS?

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A Service Level Agreement (SLA) is a subset of a Master Service Agreement (MSA) and contains specific details about the level of service that will be provided by the SaaS vendor. This agreement will specifically define the performance metrics, responsibilities, and expectations of both parties.

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An SLA is likely to include uptime guarantees, the level of support that will be provided to the customer, response times for any support requests, information on how these requests will be managed and escalated, information on how the vendor will protect the customer’s data and ensure the security of its systems and networks, as well as details on how it will compensate the customer if it fails to meet the agreed-upon service levels.