Published: 01 March 2022
Vendors are aggressively driving customers from perpetual licensing to SaaS or subscriptions by dramatically diminishing the number of perpetual options. Sourcing, procurement and vendor management leaders must prepare to negotiate pricing and terms so that each conversion benefits the enterprise.
Sourcing, procurement and vendor management (SPVM) leaders often fail to accurately assess the value of their perpetual use rights when migrating to subscription or SaaS equivalents, leading to high unexpected costs, such as unbudgeted write-offs.
In conversion negotiations, SPVM leaders aren’t leveraging their valuable perpetual use rights to negotiate favorable pricing and terms to manage long-term costs associated with data migration, consumption growth and renewals.
SPVM leaders contracting for perpetual-to-subscription software license conversions must:
Create, with assistance from IT finance, a profit and loss (P&L) impact analysis of the vendor’s proposed conversion deal. Use the findings of this analysis,
Analysts:
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