Glossary

Cloud data transfer pricing definition: per GB fees for moving data across regions, AZs, and to the internet. Internet egress runs 5 to 12 cents per GB list.

Bundle discount definition: blended discount applied when multiple SKUs are purchased together. Vendor bundles deliver 9 to 18 percent extra on top of single.

Capacity license definition: pricing tied to compute, storage, throughput, or transaction units. Capacity licenses range 18 to 34 percent shelfware on average.

Cloud egress fee definition: per GB charge for data leaving a cloud region or provider. AWS and Azure list 5 to 9 cents per GB, GCP 8 to 12 cents per GB.

CSP definition: Microsoft channel program where partners resell Azure, Microsoft 365, and Dynamics. CSP buyers typically pay list to 8 percent above EA.

Deal desk definition: vendor function that approves below floor pricing and non standard terms. 62 percent of deals over $250K ARR pass through deal desk.

A discount tier is a stepped pricing band tied to deal size, term, or commitment volume. Typical tiers move discount in 5 to 10 percentage point steps off list.

Perpetual license definition: one time fee for permanent software use rights. Now under 13 percent of new enterprise spend in 2026, displaced by subscription.

SaaS pricing tier definition: feature-bundled package levels. The median enterprise SaaS product offers 3 tiers, with a 38 to 64 percent unit price spread.

Site license definition: a single fee covering all users at a defined site or entity. Site licenses range 35 to 62 percent below per-user equivalent at scale.

Software audit definition: a vendor initiated review of license deployment against entitlement. Median settlements run 11 to 22 percent of audited spend.

Software maintenance fee definition: annual support charge of 18 to 22 percent of net license fee. Oracle 22 percent, SAP 19 percent, IBM 20 to 25 percent.

Software RFI definition: early stage discovery instrument. Median enterprise software RFI cycle runs 18 to 26 days with 6 to 9 vendors shortlisted from 14.

Software RFP definition: competitive RFPs with 3 or more bidders delivered a median 14.6 percent deeper discount than sole sourced deals.

Stack discount definition: the combined effect of multiple discount mechanisms on one purchase, with top quartile stacks at 28 to 47 percent.

What is a true up: annual reconciliation matching paid to deployed quantity. Common on Microsoft EA, Adobe ETLA, Cisco EA contracts.

What is a ULA: Oracle Unlimited License Agreement runs 36 months with unlimited deployment, then certification at term end converts use to fixed counts.

A volume purchase commitment locks a multi year spend floor in exchange for tiered discount. Typical VPC discounts run 12 to 28 percent over list.

Workday subscription unit definition: per worker pricing tied to active employee count. Mid market HCM lands at 120 to 180 dollars per worker per year on 3.

ACV software definition: the average annualized value of a contract, including services. Differs from ARR by counting all contract revenue, not just recurring.

AWS Private Offer definition: a negotiated marketplace transaction with custom price, term, and EULA, at a median 18 percent below ISV list.

AWS Reserved Instance definition: 1 or 3 year EC2 capacity commitment that cuts list rate by 35 to 72 percent in exchange for an upfront or hourly billing.

AWS Savings Plan definition: 1 or 3 year hourly compute commitment cutting EC2, Fargate, and Lambda rates by 27 to 66 percent. Three flavors: Compute, EC2.

AWS Spot Instance definition: spare EC2 capacity sold at 60 to 90 percent off on demand, reclaimable on 2 minutes notice. Best for fault tolerant, stateless.

What is an ELA: an Enterprise License Agreement is a multi product multi year contract typically delivering 28 to 40 percent discount at $1M plus ACV.

What is an Enterprise Agreement: the Microsoft EA is a 3 year volume contract with 22 to 38 percent discount and annual true up reconciliation.

ARR software definition: the normalized annualized value of recurring subscription contracts. Excludes services and one time fees. Core SaaS pricing metric.

What is AWS EDP: the AWS Enterprise Discount Program is a 1 to 5 year prepaid commit with 5 to 15 percent discount and Marketplace burn down eligibility.

BAFO definition: best and final offer round. Across 980 enterprise RFPs, BAFO rounds delivered an additional 4 to 7 percent discount on top of the initial.

Cloud cost management definition: discipline of allocating, optimizing, and forecasting variable cloud spend. Mature programs cut 18 to 27 percent of cloud.

Cloud ingress definition: data flowing into a cloud region from the public internet or another cloud. Free at AWS, Azure, and GCP under standard contracts.

Cloud marketplace definition: buying SaaS through AWS, Azure, or GCP marketplaces. 50 percent of marketplace spend typically counts toward EDP and MACC.

Co-termination definition: aligning multiple SaaS contracts to one anniversary. Co-termed renewals deliver 5 to 11 percent deeper discounts than staggered ones.

Concurrent user license definition: shared license pool used by any user simultaneously. Pools sized at 1:4 to 1:8 of named user counts. Cloud killed the model.

Consumption based pricing definition: pay only for usage of compute, storage, or queries. AWS, Snowflake, Databricks use it. Commits cut 30 to 65 percent off.

FinOps definition: practice of managing cloud spend through engineering, finance, and procurement collaboration. FinOps Foundation has 18,000+ members in 2026.

Floor price definition: the lowest unit price a vendor seller can quote without deal desk approval. Floors typically sit 38 to 52 percent below list.

What is Google Cloud CUD: Committed Use Discount runs 1 or 3 year commits with 25 to 70 percent discount on Compute Engine, GKE, and Cloud SQL.

License true-down definition: contractual right to reduce license count at renewal or mid-term. Only 12 to 18 percent of enterprise contracts allow downward.

List price software definition: the published, undiscounted unit price. Enterprise buyers rarely pay list; typical net price runs 28 to 62 percent below list.

What is MACC Azure: a Microsoft Azure Consumption Commitment is a 1 to 5 year prepaid Azure commit with 9 to 18 percent discount tiers and ACR eligibility.

Microsoft ACR definition: Azure Consumed Revenue tracked for partners. ACR retired tagged deals can move partner discount on co-sell incentives by 10 to 15.

Microsoft MCA definition: direct purchase agreement replacing EA for many buyers. MCA-E negotiated rates run 1 to 3 percent below equivalent EA on M365.

Named user license definition: a license tied to one identified person. Oracle Named User Plus carries 25 user minimums per processor. Audit risk is high.

Net price software definition: the final price one buyer pays after all discounts, credits, and concessions. The number on the invoice, not the proposal.

Oracle processor licensing definition: physical cores multiplied by a core factor of 0.25 to 1.0 (0.5 for Intel x86), the metric behind most Oracle audits.

Per seat pricing definition: flat fee per named user per month. SaaS standard since 2010, now under pressure from consumption and per token models in AI tools.

Per token pricing definition: 2026 frontier models bill 2 to 15 dollars per million input tokens and 8 to 75 dollars per million output tokens.

Per transaction pricing definition: software billed per discrete event, API call, or document. Common in payments, B2B integration, and ServiceNow Now Assist.

Premier Support definition: top tier vendor support with patches and 24x7 access. Oracle and SAP Enterprise 22 percent, Microsoft Unified 9 to 12 percent.

Ramp pricing definition: scheduled increases in committed spend across a multi year contract. Vendor ramps typically rise 30 to 80 percent year over year.

Renewal uplift definition: price increase applied at SaaS renewal. Median 2026 renewal uplift ran 7 to 9 percent across benchmarked deals, up from 4 to 6 percent.

What is RISE with SAP: a 5 year S/4HANA Cloud bundled subscription with infrastructure and BTP credits, typically 18 to 32 percent off list.

Shelfware definition: licensed but unused software. The average enterprise carries 32 percent shelfware on SaaS contracts, 19 percent on perpetual licenses.

Software asset management definition: practice of tracking software entitlements vs deployment. The average SAM program returns 14 to 22 percent license.

Street price software definition: the median negotiated price actually paid across comparable deals. Sits between list and net price as the procurement.

Subscription pricing definition: time-bound, recurring fee for software access. Enterprise SaaS terms run 1 to 5 years, 7 to 12 percent annual uplifts standard.

Sustaining Support definition: Oracle support tier that continues at 22 percent of license fee but stops new patches, certifications, and tax updates.

TCV software definition: the full committed contract value across the entire term, including services and one time fees. The headline number on most sales.

Tiered pricing definition: discount or feature levels triggered by volume. Cross-tier optimization recovers 4 to 9 percent of total contract value at renewal.