Infrastructure complexity multiplied by contract complexity
In today’s world of easy access to cloud services, shadow IT, fast-evolving business needs and increasing digitization have all added to the challenges of software negotiation. This has led to an explosion in the number of software providers that a typical company has to deal with – so the issue is far more complex than it was even a few years ago.
The complexity of contracts makes it hard for customers to see exactly what they are getting. They don’t know if they’re getting a standard contract or one that is less advantageous. Complexity means that terms and conditions are often overlooked during negotiations. But there is often more room to maneuver with terms and conditions – and customers can tip the balance of a contract in their favor.
To negotiate successfully around terms and conditions, you must know two things. First, the range of the acceptable alternatives: Just how different are different customers’ contracts? And second, what is the publisher you are negotiating with likely to accept right now?
But knowing either of these things is difficult. As a customer, you only get to see one contract every few years. You might have a good and open relationship with a peer company, which might even be prepared to discuss broad pricing. But it is probably not so close that the company would share another actual contract with you. And the devil is in the detail. Fully understanding the terms and conditions is not possible unless you know what other types of contracts are out there.
Equally, determining what the main drivers for a software publisher’s sales team are on any given day is very hard. Volume discounts, honeymoon deals, regional or industry targets, commission rates for sales staff and accounting periods all have an impact.
We have more access to this data because this is what we do. We know about the different types of contracts, and we’ve seen what motivates sales teams to get deals signed.