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Cloud Technology Contracts Should be Based on Value, Not Users

The vast majority of cloud technology pricing models are typically based on metrics like the number of users, the number of units consumed, or the different modules required etc.  Why?  Because these are easily quantifiable metrics that fall in line with the cloud technology vendors model to predict revenue over time (i.e. year after year).  This makes sense, but primarily for the provider.  If you (customer) are investing in a solution to achieve a certain set of predefined and, ideally, mutually agreed to key performance indicators (KPI's), the model of pricing proposed may not align with the reason you subscribed to the solution in the first place.   As the focus on value for money increases, alongside the functionality to generate reports that help articulate that value achieved over time, both customers and cloud technology providers need to reconsider how contracts and pricing should be structured to focus on measurable desired outcomes as opposed to just ...

A pinch of prevention is worth a pound of cure.

    Contractual transparency is like having good insurance.   We’ve all got home insurance, car insurance, life insurance, heck even smartphone insurance. We purchase and agree to these types of insurance as they are meant to help protect us should things take a turn for the worse. I’d challenge non-profit organizations and small business owners to have the same viewpoint when it comes to the negotiation of subscription SaaS contracts. Especially for those applications that will be a critical and integral part of your day to day going forward.    Why this perspective? We’ve all heard of scenarios in which a poorly written agreement comes back to surprise one or both parties that entered into it. This could be anything from poor support, lack of integration capabilities, data ownership, customer reference-ability and a whole host of others.    While nobody really wants to view a new and exciting partnership with a service provider in this light, it...