What is a reduction clause?
A reduction clause refers to a provision in a software agreement that allows customers to reduce the number of licenses or users covered by their subscription during the term of an agreement. This provides customers with flexibility to adjust their plan to meet evolving business needs, while avoiding paying for licenses or users they no longer require or needing to terminate the contract. The specific terms and requirements of a reduction clause may vary depending on the SaaS provider and the subscription agreement, for example it may be subject to a minimum number of licenses or users.
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.
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.
Maverick Buying
What is maverick buying?
Maverick spending, also known as rogue spending, can be defined as any purchasing that takes place within an organization, outside of an established procurement process.
In the context of SaaS, maverick spending refers to the acquisition of cloud-based software solutions that are purchased unbeknownst to the finance, IT or procurement teams, and in a way that does not comply with the organization’s formal IT procurement process — and so may not be approved, vetted, or appropriately documented.
Auto-Scaling
What is auto-scaling?
Auto-scaling refers to the automatic adjustment of cloud computing resources based on an organization’s current demand and workload. It dynamically adjusts the allocation of resources to match the evolving requirements of an application or system without the need for manual intervention.
There are a number of benefits to using auto-scaling, the first being cost efficiency. By ensuring that resources are scaled up or down as and when needed, organizations can avoid over-provisioning and subsequently reduce unnecessary expenses. It also helps maintain consistent performance levels by automatically adding resources during peak demand periods.
SaaS Management
What is SaaS management?
SaaS management is the process of identifying, managing, and governing the software applications that exist within an organization’s technology portfolio.
When software goes unmanaged, it not only puts the business at risk of data breaches and security issues, but it can also lead to a substantial amount of wasted spend as a result of redundant and duplicate SaaS apps, not to mention unused licenses.
Single-Tenancy Environment
What is a single-tenancy environment in cloud computing?
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.