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What are overages in SaaS?

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In SaaS, overages refer to the additional costs or fees that are incurred when a user exceeds the contracted usage limits or terms of their plan. Examples of overages include user overages, storage overages, API usage overages, feature overages and support overages.

What is decentralized procurement?

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Decentralized purchasing in SaaS refers to the process of allowing individual departments or teams within an organization to make their own purchasing decisions for software applications. This is in contrast to a centralized purchasing model, where all purchasing decisions are approved by a single procurement team or a department such as finance.
While a decentralized purchasing model can provide teams with the flexibility to select and purchase the tools that best meet their needs, without having to wait for approvals or navigate bureaucratic purchasing processes, it can create challenges for the company. This can include reduced buying power, higher costs, lack of control over vendor relationships, and increased compliance and legal risks.

What is a service level agreement in SaaS?

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A Service Level Agreement (SLA) is a subset of a Master Service Agreement (MSA) and contains specific details about the level of service that will be provided by the SaaS vendor. This agreement will specifically define the performance metrics, responsibilities, and expectations of both parties.

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An SLA is likely to include uptime guarantees, the level of support that will be provided to the customer, response times for any support requests, information on how these requests will be managed and escalated, information on how the vendor will protect the customer’s data and ensure the security of its systems and networks, as well as details on how it will compensate the customer if it fails to meet the agreed-upon service levels.

What is a single-tenancy environment in cloud computing?

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A single-tenancy environment, also known as dedicated hosting or a dedicated instance, refers to a situation where each user or tenant has their own dedicated infrastructure and resources, including servers, storage and network components. These resources aren’t shared with any other users, maximizing performance and control.

What is a break clause?

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A break clause refers to a provision within a SaaS agreement that allows either the customer or the SaaS provider to terminate the contract before the end of the initial term. A break clause will typically set out the conditions or requirements that must be met for either party to exercise their right to terminate an agreement early. For example, a break clause can enable users to cancel their subscription if they are dissatisfied with the service.

What is cloud unit economics?

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By definition, cloud unit economics refers to the financial analysis and evaluation of both the costs and revenue associated with operating a cloud-based business.

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In other words, it’s a way of looking at how much it costs to run your business on the cloud, as well as how much it brings in.