What are price uplifts?
In the context of SaaS, price uplifts refer to an increase in the price of a software subscription. While many software providers will implement price uplifts on an annual basis, typically at the point of renewal, others may review and amend their pricing more frequently, for example on a quarterly basis. It is recommended that buyers negotiate a price uplift cap during the initial contract negotiation stage, placing a limit on the maximum amount the subscription can be increased by within a specified time period.
Related Definitions
Zero-Based Budgeting
What is zero-based budgeting?
Zero-based budgeting is an accounting technique that requires all expenses to be justified and approved for each financial period, starting from zero rather than a pre-existing spend. This enables organizations to monitor and assess the necessity of each cost on a more granular level, lowering expenses and promoting fiscal responsibility.
Originally conceived in the 1970s, zero-based budgeting isn’t a new idea — but in the current economic climate, accounting for every dollar is helping businesses to regain control over their outgoings. The technique can be applied to a wide range of costs, from research and development to asset management.
Auto-Renewal
What is an auto-renewal clause?
Auto-renewal is a term often used in SaaS agreements referring to the automatic renewal of a user’s subscription plan at the end of their contract term. These auto-renewal clauses will automatically extend the user’s subscription for another period, typically the same duration as the initial term, unless the customer explicitly cancels or modifies their subscription by a specified date. This is often referred to as a termination window and is typically either 30, 60 or 90 days prior to the renewal date.
Multi-Tenancy Environment
What is a multi-tenancy environment?
In cloud computing, a multi-tenancy environment refers to a situation where multiple users, also referred to as tenants, share the same physical infrastructure and resources. These resources, such as computing power, memory and storage are dynamically allocated based on the needs of each tenant. Each tenant’s data is, however, stored in separate databases to ensure both privacy and security.
Reserved Instances
What are reserved instances?
Reserved Instances (RIs) are a pricing and capacity reservation offering provided by AWS for their EC2 (Elastic Compute Cloud) and RDS (Relational Database Service) services.
They specifically allow users to commit to using a specific instance type in the same region for either a one or three-year term, in exchange for discounts of up to 72% – the exact discount is ultimately dependent on the commitment term, instance type, availability zone and region.
There are various types of Reserved Instances available, each with different terms and levels of flexibility. Standard Reserved Instances provide the highest cost savings but are the least flexible, whereas Convertible Reserved Instances offer more flexibility by allowing you to change instance families within the same instance type.
In contrast, Scheduled Reserved Instances offer a lower discount, but allow you to reserve capacity for specific time windows, such as business hours or weekends, providing cost savings for predictable workloads.
Master Service Agreement (MSA)
What is a Master Service Agreement?
A Master Service Agreement (MSA) is a contract between two parties, in this case the software provider and the buyer, outlining the terms and conditions of the agreement. It will typically cover pricing, payment terms, service levels, intellectual property rights, confidentiality, liability, termination, and dispute resolution.
Unlike a service level agreement (SLA) which outlines the specific performance metrics and criteria for the delivery of a particular service, for example uptime guarantees and support response times, an MSA covers the broader terms of the business relationship.
Data Storage
What is meant by data storage?
In the context of cloud computing, data storage refers to the process of storing and managing digital information in either a remote server or a data center provided by a cloud service provider such as Amazon Web Services (AWS) or Microsoft Azure.
The cloud ultimately provides a versatile platform for storing various types of data, whether that be documents, media files, application data, machine learning data or structured data.