Tag: Pricing Content

How to Demystify Azure Discounting and Navigate Cloud Contract Negotiation | Blog

Cloud contract negotiation with Microsoft for Azure can be complex. By better understanding the cost reductions available at the contract and resource/functional levels, enterprises can maximize their return on investment. Read on to decipher the discounts and get the best cloud value from Azure.

You can also reach out to schedule a briefing with an Everest Group analyst for guidance on how you can uncover Microsoft Azure discounts and drive significant cost savings. Reach out

Microsoft’s public cloud offering, Azure, grew more than 20% year-over-year in 2022, driven by its long-standing partnerships and deep technical integration across different product portfolios with major enterprises. Over the years, Microsoft has successfully onboarded many existing O365, M365, etc., customers to Azure while attracting a new set of customers. To get the most value from this popular platform, procurement organizations must be aware of the nuances of cloud contract negotiation with Microsoft for Azure.

Cost is an important factor in an enterprise’s decision to move to Azure or any other public cloud. Locking in the right discounts is crucial to lower cloud operational costs and maximize the value generated from cloud. Enterprises should be well-versed in the types of discounts offered to prevent value leakage in their contracts.

Like the other major hyperscalers, Azure uses a dual-layer discounting approach as follows:

  1. Contract level discounts – Azure Commitment Discounts (ACDs)
  2. Resource/functional level discounts

Let’s explore each of these categories further:

    • Azure Commitment Discount – This discount is built into Azure’s contract and is typically contingent on the following criteria:
      • Customer’s total spend commitment
      • Length of the engagement
      • Prior relationship with Microsoft
      • Strategic value (logos and markets) to Microsoft
      • Contracting route – Direct (Enterprise Agreement) or Indirect (via Cloud Service Provider)
    • Resource or functional level discounts – Also known as programmatic discounts, enterprises can take advantage of these reductions by committing to spend a certain amount of time or money on cloud resources.

Microsoft estimates the following discounts are possible using these approaches:

      • Reserved instances – By committing to one- or three-year consumption terms for Windows and Linux virtual machines (VMs), customers can expect cost reductions of up to 72% versus pay-as-you-go rates

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      • Azure savings plan – With a committed spend of a fixed hourly amount on compute services for one or three years, customers can save between 11-65% on pay-as-you-go rates

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      • Spot instances – Customers purchasing temporary VMs for low-priority workloads from a pool of unused spare capacity can get significantly deep discounts of up to 90% compared to pay-as-you-go rates

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      • Azure hybrid benefits – This option can help customers save up to 85% in license costs by reusing on-premises licenses

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In addition to discounts, credits, incentives, and regular promotional programs run by Microsoft also can help enterprises lower their cloud expenditure. Enterprises also should investigate these options to optimize their Azure investment.

By optimizing IT architecture to realize resource and functional level discounts and effectively negotiating contract-level discounts, procurement teams can ensure they get the maximum value from an enterprise’s Azure investment.

To better understand these discount categories on Azure and discuss other cloud contract negotiation tactics, please reach out to [email protected].

Schedule your briefing with an Everest Group analyst for guidance on how you can uncover Microsoft Azure discounts and drive significant cost savings.

The Six Key Pricing Themes Dominating 2023 | Webinar

On-demand Webinar

The Six Key Pricing Themes Dominating 2023

In 2022, the outsourcing industry experienced significant attrition and wage hikes. However, those metrics stabilized in the first few months of 2023, and due to today’s economic environment, the focus has turned to cost control. To make the best decisions going forward and fulfill their cost-cutting mandates, business leaders must stay on top of these shifts.

In this webinar, our experts will discuss the six key pricing and commercial themes observed in the first half of the year and how enterprises can incorporate them into their planning whether entering new outsourcing relationships, renegotiating, or consolidating.

Our speakers will discuss:

  • Which key outsourcing pricing and commercial themes were observed in the first part of 2023
  • How these six themes are expected to play out for the remainder of the year
  • How enterprises can use these themes to plan and execute on their cost-cutting directives

Who should attend?

  • CIOs
  • Pricing heads
  • IT/BPO strategy heads
  • Strategic sourcing leaders
  • Category leaders
  • Solutions heads
  • Procurement managers
  • Vendor managers
  • Presales leads
Arora Achint
Partner
Rahul Gehani Bio Picture V1 2021 03 26
Partner
Sharma Abhishek Refresh gray square
Partner
Sundrani Ricky
Partner

AR-focused Event: How Everest Group Guides Enterprises to Better Decisions | LinkedIn Live

LINKEDIN LIVE

AR-focused Event | How Everest Group Guides Enterprises to Better Decisions

View the event on LinkedIn, which was delivered live on Tuesday, May 16, 2023.

Everest Group has been working with enterprises since its inception over 30 years ago. On a daily basis, our research teams engage enterprise clients of technology and business processes services, often in ways other research firms do not. Everest Group takes pride in our ability to provide nuanced and impactful guidance to enterprise stakeholders in a variety of roles, including procurement and sourcing, operations and delivery, technology and the CIO’s office, and customer experience leaders.

📢 In this LinkedIn Live our experts discussed how Everest Group helps shape the decisions enterprise clients make every day regarding their providers, the deals they undertake, and the solutions and technology they invest in.

What questions did the event address?

✅ What is the nature of the work Everest Group does with enterprise clients?
✅ What specific enterprise client challenges does Everest Group typically tackle?
✅ Which enterprise stakeholders does Everest Group engage?

Meet The Presenters

Arora Jimit B
Partner
Everest Group
Sharma Abhishek Refresh gray square
Partner
Everest Group
Menzigian_katrina
Vice President, Analyst Relations Engagement
Everest Group

Protecting Against Remote Cyber Threats with a SASE Framework | Blog

Remote and hybrid work models combined with the shift to cloud services have exposed enterprises to complex digital threats and cyberattacks that traditional security measures can’t effectively thwart. But a next-generation framework called Secure Access Service Edge (SASE) can help transform enterprises’ IT infrastructure by unifying network and security features. Learn more about the SASE solution in this blog. 

Contact us if you would like to discuss this topic further or if you have any questions.

Today’s cyber threats introduced by the rise in remote work have made securing data with traditional network and security measures like firewalls and virtual private networks (VPNs) increasingly challenging. A new solution, Secure Access Service Edge (SASE), can help enterprises address the following key needs:

Zero trust: Enterprises’ post-pandemic move to hybrid and remote work models essentially means employees can “connect from anywhere.” Traditional security models based on perimeter-based defenses have proven ineffective against sophisticated attacks such as phishing, ransomware, and credential theft. Most enterprises realize the immediate need for zero-trust security services, given the possibility and evolution of different threat vectors.

Cloud visibility: With the increased adoption of cloud-based resources, applications, and services, traditional network security approaches are becoming less effective. All enterprises need to monitor and understand the usage, performance, and security of their cloud resources. Challenges like shadow IT, unauthorized data access, compliance violations, etc., must be addressed to maintain a secure cloud environment.

Real-time threat detection: Cyberattacks are becoming increasingly sophisticated in today’s threat landscape, and enterprises must have the capability to detect and respond to threats quickly to minimize the impact of attacks.

Single pane of glass monitoring: Traditional security solutions offer products and point solutions from multiple vendors, which can create a complex and disjointed security stack solution. This can result in overlapping and redundant security controls, increased costs, management overhead, and potential security gaps.

How the SASE Framework addresses these challenges

SASE is a cloud-based framework that integrates multiple security services and network functions into a single platform. SASE can help enterprises address the complex and evolving cybersecurity landscape by providing a flexible, scalable, and unified network security approach.

By combining multiple technologies into a single platform, it provides a holistic and efficient way to protect an enterprise’s digital assets while ensuring employees can work securely from any location.

This integrated approach enables organizations to simplify their security stack, improve their security posture, and reduce the time and cost of managing multiple security solutions.

Implementing a SASE solution

Here are some recommendations to consider when moving to SASE:

  • Choose the right vendor

Selecting a SASE vendor that aligns with the enterprise’s requirements will increase the probability of success. Factors such as technology innovation, industry experience, and customer satisfaction should be considered

  • Integrate with existing technologies

Devising a comprehensive plan for integrating the enterprise’s existing network infrastructure with the new SASE solution can help ensure seamless compatibility with network components such as routers, firewalls, etc.

  • Phase the implementation

Implementing the SASE solution in phases, starting with the most critical applications and services, can help identify and address any issues or challenges before rolling out the solution across the entire organization

  • Define the requirements

Defining the enterprise’s requirements and objectives, including security needs and network performance, can help the enterprise select the right solution

Key elements in the complexity of a SASE solution

Implementing and managing SASE solutions is complex because of the many different factors involved, including the end users, technology stack, cloud service providers, and data centers, as illustrated below:

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SASE managed services commercial models   

As a relatively new technology, SASE pricing depends on several factors like specific features and capabilities offered and the number of end users. Below are some pricing models offered by service providers that we see in the market:

  • Per-user pricing

Providers offer a per-user pricing model, where the organization pays a fixed monthly fee per user. This model is observed in variable user environments.

  •  Tiered pricing

A few SASE providers offer pricing based on tiers, where varying sub-services are available at different price points. For example, a basic plan may include essential features like a firewall, and an advanced plan may include features like a Cloud Access Security Broker (CASB), Zero Trust Network Access (ZTNA), etc.

  • Fixed fee pricing

The SASE provider charges the client a fixed fee for a particular set of pre-defined services and may charge more for additional features or services. This is typical in organizations that have more predictability in users.

With the rise of remote and hybrid work models, we expect many enterprises to adopt the SASE framework as a solution to their networking and security needs as part of their short- and long-term strategies.

For insights on the SASE framework, pricing, and benchmarks, please reach out to [email protected] and [email protected].

Evergreen Services: The New Age Answer to Capex Crunch | Blog

In today’s fiscally and environmentally conscious times, a differentiated technology asset ownership model can help enterprises both reduce capital expenditures and improve sustainability. Read on to learn about the rise of evergreen services.

Now more than ever, enterprises are under increased pressure to rationalize expenses in the current unpredictable global business climate with the ongoing Ukrainian war, recession clouds, etc.

At the same time, enterprises around the world are quickly pivoting and incorporating sustainability as a key component of their innovation charters. Topics like reuse, recycle, and electronic waste (E-waste) management are looked at with increasingly serious and concerned lenses.

Over the last few years, device as a service (DaaS) and especially evergreen services (as a variation of DaaS) have emerged as an attractive option for enterprises to simultaneously tackle both Capex reduction and environmental sustainability commitments. Overall, DaaS is projected to grow at a compound annual growth rate of 10-15% this decade, and evergreen service is expected to contribute heavily to this growth.

What are evergreen services?

DaaS is the bundling and offering of management services and IT equipment – like personal computers, smartphones, and mobile devices – in a paid subscription model, as an alternative to purchasing these devices individually.

By extension, evergreen service is an end-user asset ownership model that helps customers convert their device acquisition-related Capex to an operating expense (Opex) while simultaneously rationalizing management overheads and providing users with increased flexibility and improved experience.

In contrast to DaaS, evergreen service puts a greater emphasis on sustainability and device performance management, and reusability. The primary focus is on meeting pre-set device performance standards, regardless of the age of the device. It also allows customers access to the latest technologies and customized services, such as device configuration, installation, data migration, on-site support, technology refresh, etc., without incurring large upfront costs.

Evergreen services: The key benefits

Evergreen services can help enterprises achieve their sustainability goals. The core philosophy of this construct is reducing e-waste by upgrading existing devices to meet performance parameters versus replacing devices outright. Existing devices are kept current and performant via updates/upgrades, spare replacement, etc. This is a stark departure from the traditional DaaS model, where devices are mandatorily replaced at the end of a pre-defined number of years.

Evergreen service also improves the user experience, creates a more stable environment, and reduces overall incidents. Due to an increased focus on proactive monitoring and managing end-user devices, a large portion of device issues are proactively identified, and preventive actions are taken to avoid service interruptions to end users. To enable this, a dedicated/shared monitoring team is deployed to perform eye-on-the-glass monitoring of the device estate using a digital experience management (DEM) tool.

The table below summarizes the key differences between evergreen and traditional DaaS models:

Parameter Evergreen Services DaaS
Proactive/preventive monitoring Higher Lower
Ticket volume Lower Higher
Onsite support requirement Lower Higher
User experience Higher Lower
End of Life refresh As needed Fixed Timeframe
E-waste generation Lower Higher

Evergreen services are slightly more expensive on paper compared to traditional DaaS services. But the long-term benefits of improved user experience, reduced incidents, and sustainability value make evergreen services an attractive proposition for today’s environmentally conscious businesses.

If your enterprise is interested in evergreen services, its pricing model, and price benchmarks across geographies, please email [email protected].

Learn more about current pricing and tech services our recent blog, Demystifying Common Low Code Pricing Models and How to Choose the Right Platform.

Software and Cloud Pricing and Contract Negotiations: Keep Spend in Check | Webinar

On-demand Webinar

Software and Cloud Pricing and Contract Negotiations: Keep Spend in Check

2022 was an unusual year for IT procurement category managers, specifically those managing software and cloud investments. We witnessed price hikes across the board from software and cloud providers, accompanied by enterprise budget cuts in anticipation of a recession.

In this webinar, Everest Group’s software pricing experts will discuss recent pricing trends, key tactics enterprises use to keep their software spend in check, and the outlook for software and cloud pricing in 2023.

Our speakers will discuss:

  • Why do enterprises find software licensing negotiations to be challenging?
  • What are the most commonly negotiated clauses in recent deals
  • What are the best practices to keep software spend in check?
  • What is the future outlook for software pricing?

Who should attend?

  • CIOs
  • CTOs
  • CPOs
  • IT strategy leaders
  • Procurement leaders managing IT categories (software, cloud & infrastructure)
  • Finance leaders
Arora Achint
Partner
Rahul Gehani Bio Picture V1 2021 03 26
Partner
Maheshwari_Udit
Practice Director
Mitra Shikharjit
Practice Director

Demystifying Common Low Code Pricing Models and How to Choose the Right Platform | Blog

Selecting the right low code/no code pricing model is essential for enterprises to realize the many cost savings benefits these popular citizen-led development platforms offer to enterprises. Read on to learn about the various factors to consider to make the best choice for your organization. 

The case for no code/low code

The last few years have been rough for most enterprises, to put it mildly. The COVID-19 pandemic disrupted supply chains and forced many businesses to close their doors. The subsequent war in Ukraine and its ramifications, such as energy crises, supply chain disruptions, etc., left many business leaders struggling to make difficult decisions and pushed enterprises to quickly adapt to new ways of working.

With market uncertainty and macroeconomic impacts looming, enterprises are seeking innovative, cost-effective tech solutions to adapt to changing demands. Low code/no code platforms aim to bridge this gap of unrelenting business needs and the restricted bandwidth of IT teams through the rise of the citizen developer.

Plethora of low code pricing models – boon or bane?

The increasing popularity of low code/no code platforms can be partially attributed to the diverse pricing options that cater to various customer needs. The extensive options offer customers greater flexibility to select the most suitable pricing to meet their requirements, enabling them to leverage low code/no code platforms and remain within budget constraints.

While offering a wide range of choices provides flexibility to procurement teams, it also can make it confusing and difficult to choose the option that works best in each context. Let’s simplify the different scenarios.

How to choose the right low code pricing model for your organization

First, pricing options can be divided into these two categories:

Perpetual licensing – Customers pay a one-time fee to use an application indefinitely.

Subscription-based licensing – Customers pay a per user/application fee. This pay-as-you-go model has gained greater acceptance among enterprises, with over 80% of clients preferring it

Now, let’s compare the two most frequently used subscription-based licensing models below:

  • Application-based pricing, as the name suggests, is based on how many end applications the enterprise builds using the low code/no code platform. Typically, platform providers offer either per-application-based pricing or a bundled price for a predefined number of applications. Bundled plans are billed for the entire contracted bundle regardless of the actual number of applications the client deploys. For example, if a client opts for a 100-application bundle, the provider will charge for the entire bundle whether the client deploys one application or 99 applications.

When does application-based pricing make sense? Application-based pricing models usually are starting points for organizations to explore low code/no code platforms. It allows them to dabble with the trend without breaking the bank because it is easier to control the number of applications. For example, an organization might use application-based pricing when replacing an HR Management System with a group of three applications (for core HR, learning and development, and payroll) built on low code/no code platforms

  • User-based pricing is more focused on how frequently the application is used versus the number of applications built. Platform providers usually classify users into the following two categories:
    • Internal users – Individuals within the organization who use the platform to access or build and deploy applications. Usually, platform providers provide a lower band on minimum commitment for the number of internal users (For example, enterprises can’t contract for five internal users)
    • External users – These are named individuals or entities outside of the organization who interact with the applications developed using the low code platform

When does user-based pricing make sense? More mature enterprises that have had successful proof of concepts and are looking to scale this organizational capability will probably find user-based pricing more convenient. At this point, their objective typically will be to democratize low-code capabilities across the organization rather than to target specific use cases.

Keeping the number of internal and external users of low-code applications as one of the primary metrics for measuring success makes sense in scale-up mode. This model also allows enterprises to pay for actual usage rather than committing to a bundle of applications they may not deploy to production

Choose a pricing model that works for your organization

Low code/no code platforms are the superheroes that enterprises need in the current uncertain and rapidly changing business environment. However, to achieve the elusive return on investment (ROI) that all enterprises look for, selecting the correct platform from the plethora of available offerings is equally essential to choosing the right pricing model.

Selecting an appropriate pricing model hinges on multiple factors, including an organization’s goals, development level, and intended use cases. Failing to properly align these requirements to the available models and pricing options can lead to either overpaying (by double or triple) for the requirement or result in dissatisfaction due to feature or usage restrictions at the chosen price point.

If your organization needs help in determining the right low code pricing model and the market price benchmarks for your low code/no code platform, email [email protected] or contact [email protected] or [email protected].

Watch the Software and Cloud Pricing and Contract Negotiations: Keep Spend in Check webinar to hear Everest Group’s software pricing experts discuss recent pricing trends, key tactics enterprises use to keep their software spend in check, and the outlook for software and cloud pricing in 2023.

Four Steps to Improve Cybersecurity Pricing and Feel More Secure with your Spend | Blog

Investing in cybersecurity can be costly for organizations but is essential in today’s risky environment. With a myriad of confusing pricing models, determining your cybersecurity spend shouldn’t be another threat. Learn some simple steps to feel more secure in negotiating cybersecurity pricing. 

Contact us to further discuss this topic or for questions.

With demand for cybersecurity services skyrocketing in recent years, budgeting decisions have moved beyond IT discussions to C-level conversations by the boards of the largest enterprises.

This focus at the highest levels, along with the rapid evolution of cybersecurity technologies and services, has brought an unintended pain point – unwieldy cybersecurity pricing structures with a great deal of overpricing by providers.

The problem is exacerbated by a few practical issues, including:

  • Vendors using different pricing models for the same service: For instance, pricing for Managed Detections and Response (MDR) solutions varies with CrowdStrike and Red Canary having per endpoint pricing, Sophos offering per user pricing, and Rapid7 following an asset-based pricing model
  • Inconsistency in defining unit-based pricing metrics: Even for seemingly commonplace services such as security information and event management (SIEM), some vendors consider peak values of events per second (EPS) while others consider average values
  • Semi-asset heavy pricing nature: Pricing is frequently a bundled black box with provider-financed licenses for cybersecurity platforms

It is not surprising that most enterprises we spoke with in the last twelve months were unsure whether they had struck the right deal with providers for their cybersecurity spend. Let’s explore this further.

Steps to achieve clearer cybersecurity pricing

Despite the nebulous structures, transparency in cybersecurity pricing can and should be achieved by following these four simple steps:

  1. Break the black box fee into logical components such as transformation costs, license costs, run fees, and project management office (PMO) charges
  2. Break the run fee to the lowest unit level, such as per endpoint for antivirus or per IP address for vulnerability management
  3. Benchmark the run fee pricing at this unit level
  4. Benchmark pricing of transformation costs, license costs, and PMO charges to achieve maximum benefits

The potential savings that can be realized by going through this process can be substantial, as illustrated in this example of a large natural resources company that had a standalone cybersecurity services relationship with a Tier-1 IT service provider.

The relationship had comprehensive coverage across the security value chain (including endpoint security, host intrusion prevention, endpoint detection and response, identity and access management, cloud security, firewalls, email gateways, network intrusion prevention, security information, and event management).

The provider financed licenses for CrowdStrike and Netskope, while the client financed licenses for other platforms such as Symantec and Palo Alto Networks. The contract had a black box fee model for a defined range of volumes (number of endpoints, firewalls, gateways, EPS, etc.).

Working closely with the client through the four-step process described above, we benchmarked the current cybersecurity spend. As a result, the client locked in a 16% spend reduction at renewal, even though the general pricing trend in the industry was clearly inflationary.

For more cybersecurity pricing tactics to increase contract efficiency and competitiveness, please reach out to [email protected] and [email protected].

Hear from our pricing experts as they discuss recent pricing trends, key tactics enterprises use to keep their software spend in check, and the outlook for software and cloud pricing in 2023 in this webinar, Software and Cloud Pricing and Contract Negotiations: Keep Spend in Check.

Will 2023’s Economic Environment Level Outsourcing Price Increases? | LinkedIn Live

LINKEDIN LIVE

Will 2023’s Economic Environment Level Outsourcing Price Increases in APAC?

View the event on LinkedIn, which was delivered live on Wednesday, March 15, 2023.

In 2022, the global talent shortage and outsourcing price increases due to wage inflation led business leaders to rethink business operations and workforce plans. As we near the close of the first quarter of 2023, will we finally see opportunities to lower costs 📈?

Join this LinkedIn live as our outsourcing pricing experts provide insights tailored to the Asia-Pacific (APAC) region into how pricing is likely to shape up in 2023.

What questions will the event address?

✅ What does current outsourced deal pricing look like in the APAC region?
✅ What is the future outlook for pricing in APAC?
✅ What should enterprises do to ensure commercial competitiveness for their deals in a fast-changing environment?

How can we engage?

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