APAC CIOOutlook

Advertise

with us

  • Technologies
      • Artificial Intelligence
      • Big Data
      • Blockchain
      • Cloud
      • Digital Transformation
      • Internet of Things
      • Low Code No Code
      • MarTech
      • Mobile Application
      • Security
      • Software Testing
      • Wireless
  • Industries
      • E-Commerce
      • Education
      • Logistics
      • Retail
      • Supply Chain
      • Travel and Hospitality
  • Platforms
      • Microsoft
      • Salesforce
      • SAP
  • Solutions
      • Business Intelligence
      • Cognitive
      • Contact Center
      • CRM
      • Cyber Security
      • Data Center
      • Gamification
      • Procurement
      • Smart City
      • Workflow
  • Home
  • CXO Insights
  • CIO Views
  • Vendors
  • News
  • Conferences
  • Whitepapers
  • Newsletter
  • Awards
Apac
  • Artificial Intelligence

    Big Data

    Blockchain

    Cloud

    Digital Transformation

    Internet of Things

    Low Code No Code

    MarTech

    Mobile Application

    Security

    Software Testing

    Wireless

  • E-Commerce

    Education

    Logistics

    Retail

    Supply Chain

    Travel and Hospitality

  • Microsoft

    Salesforce

    SAP

  • Business Intelligence

    Cognitive

    Contact Center

    CRM

    Cyber Security

    Data Center

    Gamification

    Procurement

    Smart City

    Workflow

Menu
    • Banking
    • Cyber Security
    • Hotel Management
    • Workflow
    • E-Commerce
    • Business Intelligence
    • MORE
    #

    Apac CIOOutlook Weekly Brief

    ×

    Be first to read the latest tech news, Industry Leader's Insights, and CIO interviews of medium and large enterprises exclusively from Apac CIOOutlook

    Subscribe

    loading

    THANK YOU FOR SUBSCRIBING

    • Home
    Editor's Pick (1 - 4 of 8)
    left
    Will Finance Automation Prove to be the Merger of the COO & CFO Roles?

    Amit Agrawal, Delivery Manager, NTT Data

    Asian Development Bank: Using Emerging Digital Technologies for the Common Good

    Shirin Hamid, CIO, & CTO, Asian Development Bank

    An In-depth Sight on Banking Technology

    Sandeep Khera, Chief Information Officer, XAC Bank

    Where was the Cloud when I was Younger?

    John Ferlito, Chief Technical Officer, Bulletproof

    Synergistic Opportunities for Banks and Fintech Companies

    Patrick Maes, CTO,

    Data Analytics: Bringing In A New Level Of Detail And Visibility

    David H. Robinson, SVP & Chief Information Officer, Lockton

    Demonstrating Business Value is Key To Success

    Mark Schlesinger, SVP & CIO, Broadridge

    Why Your Payments Strategy is the Key to Your Digital Future

    Tina Giorgio, President and CEO, ICBA Bancard

    right

    To Keep Control on Cloud Price Increases

    Cyril Bartolo, Corporate Head of Applications, Lagardere Group

    Tweet
    content-image

    Cyril Bartolo, Corporate Head of Applications, Lagardere Group

    In the society trend which is moving people from perpetual owners to flexible (or precarious ?) renters, our old good and perpetual software licenses became precarious cloud subscriptions, potentially leading to numerous difficulties for cloud users.

    With ‘old’ perpetual licenses, you could anticipate their future cost : either zero if no maintenance nor support attached to these licenses, or a maintenance fee based on the licenses cost often 20 percent to 25 percent and with an increase capped typically by an inflation index about two or three percent yearly, but the price was under control, predictable.

    But with cloud subscriptions, when your agreement with your Cloud provider comes to expiration, then the renewal price is unknown and has to be negotiated again, and price could even double, strongly impacting your IT budget.

    Even worse, you may not have the choice. In the ‘old’ world, if you don’t want to pay anymore the maintenance on perpetual licenses you can continue to use the software that is safe for your operations. But with cloud, as soon as you stop to pay, you lose the use rights from one day to another. In fact, if you can’t afford to lose your cloud service, you are locked in and obliged to pay any renewal price.

    The first solution to this lock-in and high price increase is competition: with IaaS where Microsoft, Amazon, Google, IBM, etc are in open competition, the prices may be stable or even decrease, so it may be a bad idea to freeze IaaS prices in a contract.
    Reversely with SaaS, where suppliers try to create monopolistic situations, prices may increase significantly.

    Best practices to keep control on SaaS cloud price increase are the following, to be included in the contract at the really beginning of your partnership with the cloud provider, at the time where the customer has a strong negotiation power, with the freedom to decide to go for this supplier or not to go (because a customer generally has no more negotiation power later in the partnership, being more or less locked-in):

    1) Prefer long contract duration for e.g. 5 years where prices will be frozen

    2) Sign in May close to supplier’s financial closing month (typically June) where negotiations are easier

    3) Define and freeze ramp-up, true-up, true-down, step-up and step-down prices

    4) Try to cap the price increase at contract renewal (if possible for several renewals) or even unlimitedly but legally tough

    5) Anticipate agreement renewal a long time in advance

    6) Have an operational BATNA (Best Alternative To Non Agreement) meaning you have an alternative to your SaaS service allowing you to say no to your supplier in case of too high price increase or unbalance contractual clause to sign: BATNA can be portability to another cloud or to on-premise

    7) Ensure reversibility is easily possible by negotiating it in the contract: enough time for it, enough bandwidth, no or few cost, data can be retrieved in a reusable format. The best is to have a reversibility function you can autonomously activate anytime

    8) Consider portability with the numerous tools dedicated to that on the market (Veeam, Veritas, CloudFastPath, Mover, Aspera, Carbonite, Box, Dropbox,…)

    9) Contract renewal may be refused by any party without any reason, in that case a prior notification of 3 months is not enough in the SaaS world to move to another software, so the notification should be 1 year in some cases or even more giving time to portability

    It would be very relevant to engage cloud suppliers into a code of conduct guaranteeing that price increase at contract renewal will be capped by an inflation index, like in the old world with perpetual licenses and capped increase of the maintenance/support.

    tag

    SaaS

    Financial

    Weekly Brief

    loading
    Top 10 Banking Technology Companies - 2020
    ON THE DECK

    Banking 2020

    I agree We use cookies on this website to enhance your user experience. By clicking any link on this page you are giving your consent for us to set cookies. More info

    Read Also

    The Blueprint behind Modernizing Branch Networks

    The Blueprint behind Modernizing Branch Networks

    Ronaldo S. Batisan, Senior Vice President - Branch Channel Management Head Of Union Bank Of The Philippines
    The Blueprint behind Modernizing Branch Networks

    The Blueprint behind Modernizing Branch Networks

    Ronaldo S. Batisan, Senior Vice President - Branch Channel Management Head Of Union Bank Of The Philippines
    Meeting Business Travel Demands with Intelligent Platforms

    Meeting Business Travel Demands with Intelligent Platforms

    Zamil Murji, Chief Technology Officer, Corporate Travel Management – Asia
    From Friction to Function: How Winc Turned Customer Feedback into Business Growth

    From Friction to Function: How Winc Turned Customer Feedback into Business Growth

    Cara Pring, Digital & Cx Director, Winc Australia
    Why Contact Centres are Becoming Strategic Hubs for Social Insight

    Why Contact Centres are Becoming Strategic Hubs for Social Insight

    Cindy Chaimowitz, GM Wholesale & Customer Service and Karen Smith, Head of Customer Service, Foodstuffs North Island
    Why Compliance Needs a Seat at the Strategy Table

    Why Compliance Needs a Seat at the Strategy Table

    David Koh, Head, Legal & Compliance (Singapore) and Operational Risk Management Country Lead, Perpetual Limited
    Streamlining Operations and Empowering Teams in Facilities Management

    Streamlining Operations and Empowering Teams in Facilities Management

    Shaye Rogers, Workflow Support Manager, Cushman & Wakefield
    Technocreativity: The Synergy Of Technology And Creativity

    Technocreativity: The Synergy Of Technology And Creativity

    Tran Nguyen Phi Long, Group Head Of Retail Marketing, Pnj Group
    Loading...
    Copyright © 2025 APAC CIOOutlook. All rights reserved. Registration on or use of this site constitutes acceptance of our Terms of Use and Privacy and Anti Spam Policy 

    Home |  CXO Insights |   Whitepapers |   Subscribe |   Conferences |   Sitemaps |   About us |   Advertise with us |   Editorial Policy |   Feedback Policy |  

    follow on linkedinfollow on twitter follow on rss
    This content is copyright protected

    However, if you would like to share the information in this article, you may use the link below:

    https://banking.apacciooutlook.com/cxoinsights/to-keep-control-on-cloud-price-increases-nwid-6386.html