When consulting on our customer’s yearly support renewals, in many cases we advise them to go for a multi-year renewal. As it is a higher cost, the prospect can be daunting on initial evaluation.
However, once you have the budget for the multi-year, opting for a one-year term is a false economy in many ways.
Firstly, and perhaps most importantly, most vendors offer significant discounts on multi-year terms. They do this because it is in their best interests to ensure that your assets remain fully supported and that you are on the latest version of any applicable software.
In many cases we see only a nominal difference between a 1- and 2-year option. In addition, if you opt to renew a piece of infrastructure for multiple years, you will not be penalised for adding additional components to expand that infrastructure over that time period. However, if you opt to renew on a yearly basis, the install base will be scrutinised each year and you will pay for any additional capacity you have added. Each vendor has different pricing structures and we know that figuring them out can be complex. For this reason, each of our renewal specialists is highly trained so they can advise you on the best renewal choices to opt for across your entire technology portfolio.
The next benefit of a multi-year renewal is the security this type of contract offers your organisation. Once a vendor sells a multi-year contract to you, they must honour that commitment. We have seen instances where support is discontinued for certain lines by the vendor and cannot be renewed. However, provisions must be made for customers who are still within a contract. In addition, a multi-year contract eliminates the potential for a support renewal to slip through the cracks. Most organisations don’t have a dedicated renewals manager internally which means that support renewals and subscriptions are often missed leading to potentially costly reinstatement fees, recertification and most hazardously – your IT estate being left in a very vulnerable position. Multi-year contracts ensure ongoing support, save your internal IT teams time and make sure that you don’t encounter any nasty unexpected expense.
The only downside to renewing for a multi-year term is paying for more support that you will need. We understand that customers may not always be certain on the lifespan of a piece of infrastructure of software within their organisation, which can prevent them from considering a multi-year contract. What many customers do not realise is that we can negotiate a clause in the contract that allows for swift cancellation of support and a refund for the support period that is no longer required.
With this provisioned for, there is truly no reason not to consider a multi-year contract when your support or subscription is next due for renewal.
We are available to offer more specific advice pertaining to your unique organisation and technologies. We would be delighted to help take some of the complexities out of your renewals. For more information on the topics discussed in this blog or any general support queries please reach out to a member of our specialist team at [email protected]