Gartner Research

Use These 3 Best Practices to Minimize the Costs and Risks of Variable-Based Software Pricing Metrics

Published: 02 January 2020

ID: G00447894

Analyst(s): Lori Samolsky , Bill Ryan


Sourcing, procurement and vendor management leaders negotiating software and cloud contracts with variable-based pricing metrics, such as annual revenue, face substantial risks and unbudgeted costs. Incorporating four key contractual terms will mitigate future cost exposure.

Table Of Contents
  • Key Challenges



  • Negotiate Four Key Contractual Terms to Protect Against the Downsides of Variable-Based Pricing Metrics
  • Ensure Stakeholders Are Armed With Key Questions to Ask Any Vendor Proposing Variable Pricing
  • Conduct a Rigorous Evaluation of Existing Contracts

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