Gartner Research

Tying Software License Cost to Revenue-Based Pricing Metrics Poses a Threat to Predictable IT Spending

Published: 17 March 2015

ID: G00275686

Analyst(s): David McCoy , Lori Samolsky

Summary

Blindly licensing software via an unclear revenue-based pricing metric will expose your organization to substantial risk, costs and nasty surprises. Do IT procurement professionals really want to have to explain to their CEO and CFO why revenue growth isn't such a "great idea" this fiscal year?

Table Of Contents
  • Key Challenges

Introduction

  • Who Dug the Hole?
  • Why Is a Revenue-Based Approach a "Hole Demanding Caution?"
  • Is There Any Benefit in a Revenue-Based Pricing Metric Approach?
  • Gartner's Position Is Clear: The Risks of Revenue-Based Pricing Metrics Outweigh the Focused Benefits

Analysis

  • Publicize to Your Stakeholders the Risks and Complexities of Revenue-Based Pricing Metrics
  • Prepare Your Organization for Known Revenue-Based Pricing Metric Risks Through a Rigorous Evaluation of Its Existing Contracts
  • Protect Your Organization by Agreeing Contractual Boundaries for Revenue-Based Pricing Metrics Across IT and Non-IT Functions
  • In Conclusion

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