SaaS Vendor Management

After reviewing 30+ SaaS contracts last quarter.... I've identified the 50 most commonly overlooked provisions that could save your business from costly disasters. The average enterprise now uses 130+ SaaS solutions, with critical business functions entirely dependent on third-party software. Yet 67% of SaaS agreements lack basic protections for: - Service interruptions - Data breaches - Vendor acquisition/bankruptcy - Unauthorized data usage The cost of these gaps? Companies lose an average of $218,000 per SaaS-related incident. 1. Service Level Agreement (SLA) Terms ☑️ Specific uptime commitments (99.9% isn't enough—define the measurement period) ☑️ Exclusions from SLA calculations (planned maintenance should be capped) ☑️ Meaningful compensation tied to impact (not symbolic credits) ☑️ Response time commitments for different severity levels ☑️ Escalation procedures with named contacts 2. Data Protection Provisions ☑️ Data residency requirements (specify geographic locations) ☑️ Processing limitations beyond standard privacy policies ☑️ Prohibition on de-anonymization attempts ☑️ Detailed breach notification timelines (24 hours should be standard) ☑️ Data return procedures upon termination (specify format) 3. Integration & API Requirements ☑️ API stability commitments with deprecation notice periods ☑️ Rate limiting disclosures and guarantees ☑️ Integration support obligations ☑️ Third-party connector maintenance responsibilities ☑️ Technical documentation updating requirements 4. Termination Rights & Processes ☑️ Partial termination rights for specific modules/services ☑️ Data extraction assistance requirements ☑️ Transition services obligations ☑️ Wind-down periods with reduced functionality ☑️ Post-termination data retention limitations 5. Liability Protections ☑️ Exception to liability caps for data breaches ☑️ Separate liability caps for different violation categories ☑️ Indemnification for vendor's regulatory non-compliance ☑️ Third-party claim procedures with vendor-provided defense ☑️ IP infringement remediation obligations 6. Service Evolution Safeguards ☑️ Feature removal notification periods (90+ days) ☑️ Version support commitments ☑️ Mandatory backward compatibility periods ☑️ Price protection for existing functionality ☑️ Training for significant interface changes Last month, a client using this checklist discovered their mission-critical SaaS provider had no formal commitments on API stability. After negotiation, they secured: - 180-day notice for any API changes - Technical support during transitions - Compensation for integration rework Three weeks later, the vendor announced a major API overhaul that would have cost $200K to adapt to without these protections. Want the expanded 50-point SaaS contract checklist with negotiation strategies for each provision? Comment "CHECKLIST" below and I'll send you the full resource. #contracts #saasagreements #saas #agreements #contractdrafting

I'm wrapping up another quarter negotiating SaaS deals, and for one deal, I was debating what term length to pursue. (Contract term length has become one of our most critical strategic decisions in procurement.) 🔹 The Current Landscape 🔹 The market has shifted dramatically. SaaS contract lengths plummeted in 2023 and have only slightly rebounded in 2024 (still averaging under 15 months). Meanwhile, price uplifts have soared to unprecedented levels. 3-15% is now standard, with some vendors pushing shocking increases (just heard from a fellow procurement leader facing a 200% increase on a multi-million dollar spend... ouch). 🔹 The Pendulum Swing 🔹 I'm seeing two distinct approaches emerge: Some companies have instituted strict policies capping contracts at 12 months (too many got burned in 2022 with oversized multi-year commitments). Others still pursue 3+ year terms to maximize discounts and shield themselves from those aggressive annual uplifts. 🔹 My Portfolio Breakdown 🔹 Looking at deals I've personally negotiated over the past few months: 1-year terms: 56% 2-year terms: 31% 3-year terms: 7% < 1-year terms: 6% > 3-year terms: 0% Surprisingly, 2-year deals weren't higher. For me, they often hit a sweet spot: enough leverage for better pricing, reasonable commitment timeframe, and price protection for 24 months without being locked in forever. 🔹 My Decision Framework 🔹 While every situation demands nuance, here's my general approach: 1-Year Terms When: 🔸 New vendor (even thorough due diligence has blind spots) 🔸Highly competitive market (optionality is a beautiful thing) 🔸Rapidly evolving space (avoid lock-in with outdated tech) 🔸Low switching costs (maybe we go in another direction). 🔸Current vendor with performance issues or pricing concerns (goal here is to start shopping alternatives) 2-Year Terms When: 🔸Stable, predictable growth projections for seats/usage 🔸Balanced need for pricing leverage vs. flexibility 🔸Vendor relationship is solid but not critical infrastructure 3-Year Terms When: 🔸Core enterprise systems (sticky, difficult to replace) 🔸Vendors with consistent, aggressive YoY increases that are hard to push back on (although sometimes we pivot to a 1 year deal to switch to someone else). 🔸 We've validated long-term fit and negotiated favorable terms (partnership). I know everyone loves a three year term but if it's pushed to hard (by either procurement or sales), it can hurt trust. The dataset isn't massive but interesting not the less. Anything surprise you here?

"I won't consider a vendor unless I can test the product myself." I used Wynter to survey 100 CTOs and engineering leaders in B2B SaaS to understand how they really choose vendors in 2025. Here's what we learned: 1. The truth about finding vendors • 73% begin with Google (yes, really) • Then they check Gartner, G2, and peer networks • Only 6% discover vendors at conferences "We use Google searches and vendor review sites to build out a list of potential vendors, maybe 6-10 companies" 2. Size changes everything Big companies (enterprise): • 30% use formal RFPs • Need security certs and compliance docs • Long sales cycles • IT, Finance, Legal, and Compliance are involved to ensure fit "We issue an RFP, score vendors on security, price, and reliability" Smaller companies (201-1,000 employees): • 70% skip RFPs entirely • Want hands-on testing and quick pilots • Focus on speed and flexibility "We don't have time for long RFPs. Give me a demo and let's see if it works" 3. The demo-or-die reality • 60-70% won't buy without trying first • Free trials and sandbox accounts are expected • Proof of concepts are the new pitch deck "We require every vendor to conduct a hands-on PoC before we make a final decision." "If a vendor refuses a proof of concept, they are out of the running." 4. Price isn't everything (but it's close). While cost is always a consideration, companies prioritize value, flexibility, and long-term ROI over the cheapest option. They want • Transparent pricing • Rate hike caps • Flexible terms • Clear value alignment "Negotiation always happens, but we care more about reliability and support than cutting costs." "We never accept the first price. There’s always room for negotiation." The seniority split CTOs and CIOs: • Care about long-term strategy • Focus on risk and scale • Love their RFPs "We run a structured RFP process, involving Finance, IT, and end-users to ensure alignment." VPs and directors: • Want fast implementation • Focus on immediate impact • Hate your RFPs "Smaller teams like ours don’t need RFPs. We shortlist 2-3 vendors, demo, and pick the best one." Big companies need your paperwork. Small companies need your product. Both need proof it works. Want to close more deals with tech leaders? Here's what actually works: • Get analyst reports and customer references ready. CTOs trust their peers and analysts, not your pitch deck. • Let them test drive. If they can't try before they buy, you're dead in the water. Free trials and proof of concepts aren't optional anymore. • Cut the pricing games. Hidden costs and sneaky price hikes? That's a fast way to lose deals. Be upfront. • Enterprise deals? Get your paperwork in order. • Be flexible or be forgotten. The more flexible you are with pricing, contracts, and support, the more deals you'll win.

Software Licensing & Vendor Contracts: The Deal Killer You Didn’t See Coming Most business owners don’t realize that software licenses and vendor contracts can completely derail an acquisition—until it’s too late. Buyers expect clean, transferable agreements. If your contracts are restrictive, outdated, or non-compliant, expect delays, renegotiations, or even a deal falling through. 6 Licensing & Vendor Pitfalls That Can Disrupt Your Sale 🔹 Licenses That Aren’t Transferable Many SaaS agreements require vendor approval for transfer—meaning buyers might not be able to inherit key tools. ⇢ Fix It: Review contracts now and ensure assignability clauses are in place. 🔹 Shadow IT & Compliance Risks Unauthorized software use can lead to unlicensed tools, security gaps, and legal trouble. ⇢ Fix It: Conduct an IT audit, remove non-compliant software, and standardize usage policies. 🔹 Vendor Lock-Ins That Limit Flexibility Strict vendor contracts can trap buyers in long-term obligations they don’t want. ⇢ Fix It: Negotiate exit-friendly terms before listing your business. 🔹 Open-Source Software (OSS) Risks Improper use of open-source code can create IP disputes and licensing violations. ⇢ Fix It: Run an open-source audit, document licensing properly, and ensure compliance. 🔹 Missing or Weak Data Protection Agreements (DPA) Handling customer data? GDPR, CCPA, and SOC 2 compliance are non-negotiable. ⇢ Fix It: Ensure all vendor contracts include data protection clauses that meet regulatory requirements. 🔹 Last-Minute Licensing Scrutiny Buyers don’t want surprises. Inconsistent documentation can delay due diligence and weaken deal terms. ⇢ Fix It: Proactively review vendor agreements, resolve gaps, and document compliance before going to market. Why This Matters A great business with messy contracts = lower valuation and deal risk. A great business with a clean, transferable vendor structure = premium exit. If you’re planning to sell, software licensing isn’t a minor detail—it’s a deal-critical factor. 🚀 Want expert insights on vendor contracts, licensing, and deal readiness? Join our SaaS-specific webinar on March 19, 2025. 📩 Registration link in the comments! #MergersAndAcquisitions #SoftwareLicensing #ExitStrategy #VendorContracts #DueDiligence #BusinessSale #SaaS #Entrepreneurship

I've seen various websites pop up claiming to offer the prices that other users pay for enterprise SaaS software. https://www.vendr.com is a new one that's making the rounds. The price an enterprise pays for high AOV SaaS, like a commerce platform, is next to impossible to reverse engineer. Enterprise SaaS pricing depends on some combination of: - How much do you use the product? A retailer selling $25k watches and $2 pencils may have the same GMV at the end of the year but dramatically different product usage patterns. We have internal gross margin targets and try to peg our pricing to that - How successful do we think you'll be? We as a vendor don't want failed implementations out there. They're expensive for us to fix and cause reputational damage. If we think you're going to ignore our guidance, we may charge you a premium. We want to partner with our customers: https://lnkd.in/guFDHQtC - Will you do referencing for us? If we as a vendor can have you do a mainstage keynote or speak to other prospects on our behalf, that's worth a lot to us - What's the cross-sell and up-sell potential? Can we make you so successful that you'll end up using us for other use cases, geos, etc? - Can we kneecap a competitor? Starving a specific competitor in a geo or for a specific use case is valuable for us on occasion - Do you help us as a vendor enter a new geo? Having a flagship customer in a new country or geo is valuable - Can you help us as a vendor enter a new vertical? Having a flagship customer in healthcare, or government, for example is worth a discount - Do you have a reputation for not paying bills? The CFO of a certain midwestern retailer was famous for having a sign on his office door titled "25 reasons not to pay a vendor invoice." No thanks - Are you at risk of bankruptcy, PE takeover, or some other big event that could impact your strategy and/or your ability to pay? For smaller ticket SaaS, like an Office or Slack subscription, different rules apply. But for something as consequential as a commerce platform - the above considerations can definitely impact the price you pay.

⛔Trust but Verify - Choose Your Vendors and Partners with Care⛔ I want to highlight a recent breach that deserves the attention of every executive responsible for risk oversight. Google and Salesforce confirmed that attackers exploited OAuth tokens from Salesloft’s #Drift integration, gaining unauthorized access to Salesforce environments and even a small set of Google Workspace accounts. The attackers weren’t after chat transcripts. They went directly after high-value credentials like AWS keys and Snowflake tokens. They queried Salesforce data on accounts, opportunities, and users, then deleted traces to hide their activity. This isn’t just another SaaS headline. It is a textbook case study of third-party risk materializing into enterprise harm. And it will happen to you. Executives often ask why they should invest in third-party risk management (#TPRM) when the vendor is the one that got breached. The answer? Your organization is still the one that suffers the data theft, regulatory exposure, reputational damage, and operational disruption. It is your customers’ data, your intellectual property, and your trust at stake. Three key lessons for leaders: 🔹Tokens are powerful and persistent. OAuth tokens can grant long-lived access unless tightly scoped, rotated, and expired. Treat them with the same governance as user credentials. 🔹The SaaS supply chain is a direct extension of your enterprise. A “lightweight” integration like Drift can become the pathway to your crown jewels if not continuously monitored. 🔹Visibility and response readiness are non-negotiable. In this breach, audit logs were the only reason the activity was eventually uncovered. Many organizations lack this basic level of assurance across their SaaS footprint. The broader takeaway: third-party risk is enterprise risk. Leaders cannot silo vendor oversight to procurement checklists or once-a-year questionnaires. Boards and executives should be asking: 🔸How many integrations have persistent tokens into our core systems? 🔸Do we have continuous visibility into what those integrations are doing? 🔸Do we have the playbooks to revoke access and investigate quickly when something like this happens again? This event has to serve as a wake-up call. Third-party risk management is not optional insurance (nor a nuisance); it is a frontline defense against the very real harms that can cascade from a single weak link. Executives who treat vendor governance and TPRM as strategic priorities will be far better positioned to protect their organizations when the next breach is uncovered. 🌐 https://lnkd.in/e7Jxqhah A-LIGN #TheBusinessofCompliance #ComplianceAlignedtoYou

73% of SaaS vendors, including giants like Zoom and Microsoft, increased their prices last year, pushing software inflation to 8.7% — double the US headline inflation rate. This trend has software costs skyrocketing. But why the spike? 1/ Major players like Google Workspace and Salesforce announced price hikes of up to 20%. 2/ A shift in discount strategies has made costs even less predictable. 3/ Over half of vendors complicate budget planning by keeping enterprise pricing hidden. So what can you do about it? 1/ Start with visibility: You can't fix what you can't see. Start with an audit of your SaaS spend and usage to identify underutilised contracts or tool duplications. (You can do this in a few minutes by connecting your SSO to Sastrify.) 2/ Negotiate wisely: Don't accept price increases without a fight. Use insights from your audit to renegotiate terms or consolidate apps. 3/ Benchmark everything: Use SaaS pricing data to accurately benchmark your current contracts and offers against the market. 4/ Cultivate cost-awareness: Encourage a culture where every software purchase is scrutinised for its cost-benefit and duplication potential. Modern businesses must be more vigilant and strategic in their software investments, and adopting a proactive stance can lead to significant savings and more sustainable growth. #SaaS #procurement #purchasing

We just wrapped a OneTrust Third Party Management deployment. Here are a few of our guiding principles from the project: 1. Define “Third Party” Clearly Your vendor list isn’t your TPRM scope. Align on who actually needs to be reviewed and why. Often a risk-based decision. The messy middle is where I would focus. I'm a fan of risk-scoring vendors like Black Kite to prioritize your time. 2. Skip the Day 1 Automation Trap If your intake process is messy, automation won't solve that. Let's define the process and then automate that after. Especially important for immature organizations. 3. Assessments Need a Strategy A common flow is a triage/scoping assessment that then triggers the right downstream full-assessment based on use case. Your consulting vendors don't need to fill out a SaaS assessment. 4. Get the Right People at the Table TPRM touches Privacy, Security, Procurement, and Legal. Build with them, or deal with cleanup later. Very common for us to consolidate 4 assessments into 1 to avoid repetitive questions for vendors. 5. Build With Reporting in Mind I'll say it again. What reports do you want? Define them now because you can't report on the data if you don't collect it. Design your statuses, risk ratings, and dashboards on purpose from day one.

Every year SaaS spend grows 10%+. And every year IT leaders and CFOs stare at a growing pile of underutilized and unused software. The problem isn’t budgeting—it’s internal disconnect. Here’s who’s contributing and how to fix it: → Software vendors: tools are likely far too complex. As a buyer, trial them and look for reviews on usability. If they’re hard for you, they’ll be hard for your team. → Consulting teams: typically focused on setup, not tailoring for your business. Manage them to build tools for real-world user scenarios and scope in ongoing optimization. → Training & enablement teams: If they're building info-packed PowerPoints and videos, it's just doomed to go unused. They need to be building modern enablement solutions that surface answers in real time. → Business leaders: often buying tools for features or promises and not outcomes. They need to buy for pressing need where there will be no lack of motivation to start using it and making it work. SaaS is powerful. There's still so much untapped opportunity for productivity gains. But there's no magic shortcuts. As IT leaders, you need to understand the full picture of adoption and help guide your stakeholders. (data from Statista)

I wasted hours on Vendor Management, until I learned this. I was stuck in endless emails, messy spreadsheets and I had no clear way to track supplier performance. These inefficiencies waste time and money. Then I discovered Lean Six Sigma. It helps businesses eliminate waste and reduce errors, making vendor management smoother and data-driven. Here’s how: • Cut unnecessary work. Automate tracking & approvals. • Make data-driven decisions. Use vendor scorecards, not gut feelings. • Reduce mistakes. Apply DMAIC to fix recurring supplier issues. • Strengthen vendor relationships.  Align goals for better performance. Companies that apply this: • Cut admin work by 50% (APQC Supply Chain Study) • Improve supplier performance tracking (Deloitte CPO Survey 2023) • Save thousands by eliminating inefficiencies (Deloitte & Six Sigma case studies) Want to apply this easily? Try Vendor Score IT. A tool that helps you track, rate, and improve vendors using real data.