Gartner Research

Use a Well-Constructed Price Escalation Clause to Reduce Software Costs

Published: 19 December 2013

ID: G00258369

Analyst(s): Frank DeSalvo

Summary

The price escalation clause, or price cap, in a software contract can dramatically reduce ongoing costs. Gartner provides guidance on how IT procurement professionals should negotiate this provision to minimize exposure to unexpected price increases.

Table Of Contents
  • Key Challenges

Introduction

Analysis

  • How to Apply the CPI
    • Definition of Consumer Price Index
    • Types of CPI
  • How to Calculate CPI Change
  • Best Practices to Avoid Common Escalation Traps

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