ELAs, multi-year commits, true-ups, escalators, discount math, and contract renewal strategy.
72% of reps discount in more than half of deals. A significant portion were unnecessary. The math on irrational discounting, the discount authority matrix, and what best-in-class looks like.
MSA structure, order forms, escalator clauses, usage floors, and true-up schedules. Every ambiguity in your contract becomes a negotiation at renewal. Here's how to write them out.
40% of SaaS deals are now multi-year. In 2022 it was 14%. You're still giving 10% off and calling it a win. Here's the actual math.
An ELA is a multi-year contract that gives an organization broad access to a vendor's products for a committed annual spend. ELAs typically include true-up provisions, usage floors, discount schedules, and renewal terms. They're making a comeback — 40% of SaaS deals are now multi-year.
Set clear discounting guardrails: maximum discount thresholds by deal size, approval chains for exceptions, and always tie discounts to something (multi-year commitment, case study participation, annual prepay). Track your discount rate — if 72% of reps discount in half their deals, your list price is fiction.
Start 120+ days before renewal. Audit usage data to justify value, address any support tickets or unresolved issues, prepare expansion proposals tied to new use cases, and eliminate ambiguous contract language that becomes a negotiation lever.
Committed spend is a guaranteed minimum annual payment regardless of actual usage. The customer gets a discounted rate in exchange for the commitment. If they exceed the commitment, they pay overage at a contracted rate. This model dominates cloud infrastructure (AWS, GCP, Azure) and is spreading to SaaS.