Vendor offers a 36-month contract with discount versus 12-month without
The discount looks attractive, but locking in for 36 months on a SaaS or IT tool can hurt when the company grows, shrinks, or a better option appears. For stable tools with little expected change, the discount is real; for growth phases, rarely.
Try this first
- 1Read the clauses on cancellation, price changes and user flexibility. Some 36-month contracts allow annual price hikes despite the "fixed" term.
- 2Compute break-even. If the discount is for example 15%, how many months must the tool stay to beat 12-month flexibility? Doubt the tool will be in your stack in 18 months: pick 12.
- 3Negotiate an exit or swap clause. Many vendors accept a mid-term move to a higher tier when you threaten to cancel.
- 4Record the end date in a shared calendar with a 90-day pre-alert, otherwise it rolls over silently on the old terms.
When to bring us in
On contracts above meaningful annual value or with use-or-lose clauses: have procurement or an external advisor read along. Standard templates are usually drafted in the vendor favour.
See also
- What does Managed IT actually cost for a 10-person SMBNo fixed number, but an honest breakdown. A full package for ten people is not 50 euros a month and not 5000 either.
- Microsoft 365 Business Standard versus Premium, what is extraThe price jump is real but Premium does not add Word features. It adds security and device management.
- Microsoft announces another price hike, what do I doSince NCE Microsoft adjusts pricing structurally. Without action you renew at the new price for a full year.
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