Buying Cloud Technology Subscriptions

06/25/2022 10:11 PM | Gordon Mayer (Administrator)

Innovative cloud technologies can do wonders to increase nonprofits’ reach, efficiency, and cost savings - and the list of benefits goes on.

But the benefits come with a price. Planning your approach when signing up for a yearly agreement with a particular cloud technology provider is important to get both the best cost and the most effective solution for your nonprofit.

Even with the growing efforts of some tech start-ups to help shed light on cloud technology pricing, there are situations in which one organization provides similar services but still gets a significantly different price than another. What’s missing?

Sometimes, the missing element is one or more key players in the nonprofit organization looking to add a cloud based solution (some well-known examples: SalesForce,Mailchimp, DocuSign).

Many cloud-based applications target a specific line of business (HR, Procurement, Marketing, Legal etc.) as opposed to just IT. But those directly involved in that business area may lack the time, effort and experience to understand and negotiate critical terms in a cloud technology contract. 

For-profits may have a dedicated “Head of Technology Sourcing.” The person in this role is specifically tasked with overseeing such cloud technology contracts/subscriptions, leveraging their experience and relationships with the business, IT and Legal to do so. 

In nonprofits, we often see just the person leading that line of business or just the IT contractor left with the responsibility of reviewing and understanding what they are getting into. Neither of these individuals or teams alone can fully align on the importance of the cloud application to the organization overall.

It’s helpful to get your full team at the table, specifically the line of business, Legal and IT with the understanding that each of their inputs will impact both what will be paid, and the overall relationship with the cloud technology provider. You will need everyone's commitment throughout the process. 

Here are some additional tips on evaluating cloud-based technology solutions:

  1. Do some research prior to signing. What have your peers paid? Why? What measurable value did they ultimately get? How does the pricing provided compare to what is publicly listed on the cloud provider’s website? Are there additional discounts available for the nonprofit customers?

  2. Seek to understand the cloud technology business model along with common terminology that may show up in your agreements. This includes common acronyms like ACV (Annual Contract Value), TCO (Total Cost of Ownership), SOW (Statement of Work), SLA (Service Level Agreements), MTTR (Mean Time To Repair) and others. Uncover what else is going on behind the scenes that can influence what you will end up paying through conversations with others besides the sales team.

  3. Where necessary, get outside help.  While your internal team and the research you’ve done will certainly help equip you for the negotiation, having a partner that has experience in these types of transactions to advise on various topics, will only increase the value you plan to get from your investment while mitigating risks due to missed/overlooked nuances.

  4. Vendors can be an asset to the process. Approach these new contractual relationships in the spirit of transparency and collaboration, and avoid the combative techniques associated with the old “them vs. us” mindset. You will end up with a real partnership based on value and accountability that will ultimately result in the mutual success of your nonprofit and the cloud technology provider. 

Planning, research and internal alignment are the biggest challenges to understanding and signing up for cloud technology subscriptions. These are never easy - but again like most other things in life, the effort you’ll put into them can pay off in effectiveness, efficiency, and cost savings. 

Kevin Christopher-George of GreenMerits Consulting is tapping into his 20+ years of experience across different areas in technology management to advise nonprofits on how to find, adopt and use technology that will increase their positive impact. His passion is geared towards how organizations can build meaningful, value driven, and mutually beneficial relationships with technology providers.

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