Glossary
Procurement, licensing, and contract terms defined in buyer-side language.
Key points
All 60 pages
- Cloud Data Transfer Pricing: DefinitionCloud 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.
- What Is a Bundle Discount? Definition and MechanicsBundle discount definition: blended discount applied when multiple SKUs are purchased together. Vendor bundles deliver 9 to 18 percent extra on top of single.
- What Is a Capacity License? DefinitionCapacity license definition: pricing tied to compute, storage, throughput, or transaction units. Capacity licenses range 18 to 34 percent shelfware on average.
- What Is a Cloud Egress Fee? DefinitionCloud 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 to.
- What Is a Cloud Solution Provider (CSP)? DefinitionCSP definition: Microsoft channel program where partners resell Azure, Microsoft 365, and Dynamics. CSP buyers typically pay list to 8 percent above EA.
- What Is a Deal Desk in Software Sales? DefinitionDeal desk definition: vendor function that approves below floor pricing and non standard terms. 62 percent of deals over $250K ARR pass through deal desk.
- What Is a Discount Tier in Software Negotiation?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.
- What Is a Perpetual License? DefinitionPerpetual license definition: one time fee for permanent software use rights. Now under 13 percent of new enterprise spend in 2026, displaced by subscription.
- What Is a SaaS Pricing Tier? DefinitionSaaS pricing tier definition: feature-bundled package levels. The median enterprise SaaS product offers 3 tiers with 38 to 64 percent unit price spread top.
- What Is a Site License? Definition and BenchmarkSite 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.
- What Is a Software Audit? Definition and ProcessSoftware audit definition: vendor initiated review of license deployment against entitlement. Median enterprise audit settlement lands at 11 to 22 percent of.
- What Is a Software Maintenance Fee? DefinitionSoftware 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.
- What Is a Software RFI? Definition and BenchmarksSoftware RFI definition: early stage discovery instrument. Median enterprise software RFI cycle runs 18 to 26 days with 6 to 9 vendors shortlisted from 14.
- What Is a Software RFP? Definition and BenchmarksSoftware RFP definition: structured procurement request for proposal. Competitive RFPs deliver 11 to 19 percent deeper discount than sole sourced deals on.
- What Is a Stack Discount? Definition inStack discount definition: combined effect of multiple discount mechanisms applied to one purchase. Enterprise stacks reach 28 to 47 percent total versus.
- What Is a True Up in Software Contracts?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 LicenseWhat is a ULA: Oracle Unlimited License Agreement runs 36 months with unlimited deployment, then certification at term end converts use to fixed counts.
- What Is a Volume Purchase Commitment (VPC)?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.
- What Is a Workday Subscription Unit?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.
- What Is ACV Software? Annual Contract Value DefinedACV software definition: the average annualized value of a contract, including services. Differs from ARR by counting all contract revenue, not just recurring.
- What Is an AWS Private Offer? Marketplace DefinitionAWS Private Offer definition: negotiated marketplace transaction with custom price, term, and EULA. Median discount 18 percent below ISV list across comparable enterprise deals.
- What Is an AWS Reserved Instance? DefinitionAWS 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.
- What Is an AWS Savings Plan? DefinitionAWS 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.
- What Is an AWS Spot Instance? DefinitionAWS 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? Enterprise License DefinedWhat 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 (EA)?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.
- What Is ARR Software? Annual RecurringARR software definition: the normalized annualized value of recurring subscription contracts. Excludes services and one time fees. Core SaaS pricing metric.
- What Is AWS EDP? Discount ProgramWhat 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.
- What Is BAFO? Best and Final Offer DefinitionBAFO 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.
- What Is Cloud Cost Management? DefinitionCloud cost management definition: discipline of allocating, optimizing, and forecasting variable cloud spend. Mature programs cut 18 to 27 percent of cloud.
- What Is Cloud Ingress? DefinitionCloud ingress definition: data flowing into a cloud region from the public internet or another cloud. Free at AWS, Azure, and GCP under standard contracts in.
- What Is Cloud Marketplace Procurement? DefinitionCloud marketplace definition: buying SaaS through AWS, Azure, or GCP marketplaces. 50 percent of marketplace spend typically counts toward EDP and MACC.
- What Is Co-Termination? Definition and BenchmarkCo-termination definition: aligning multiple SaaS contracts to a single anniversary. Co-termed renewals deliver 5 to 11 percent deeper discount than.
- What Is Concurrent User Licensing?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.
- What Is Consumption-Based Pricing?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.
- What Is FinOps? Definition and OriginFinOps definition: practice of managing cloud spend through engineering, finance, and procurement collaboration. FinOps Foundation has 18,000+ members in 2026.
- What Is Floor Price in Software Sales? DefinitionFloor price definition: the lowest unit price a vendor seller can quote without deal desk approval. Floors typically sit 38 to 52 percent below list across.
- What Is Google Cloud CUD? DefinedWhat 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.
- What Is License True-Down? Definition andLicense true-down definition: contractual right to reduce license count at renewal or mid-term. Only 12 to 18 percent of enterprise contracts allow downward.
- What Is List Price Software? Definition and UseList 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? Microsoft CommitWhat 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.
- What Is Microsoft ACR? Co-Sell and ACR MechanicsMicrosoft ACR definition: Azure Consumed Revenue tracked for partners. ACR retired tagged deals can move partner discount on co-sell incentives by 10 to 15.
- What Is Microsoft MCA? Customer Agreement DefinitionMicrosoft MCA definition: direct purchase agreement replacing EA for many buyers. MCA-E negotiated rates run 1 to 3 percent below equivalent EA on M365.
- What Is Named User Licensing? DefinitionNamed user license definition: a license tied to one identified person. Oracle Named User Plus carries 25 user minimums per processor. Audit risk is high.
- What Is Net Price in Enterprise Software?Net price software definition: the specific final price one buyer pays after all discounts, credits, and concessions. The number on the invoice, not the.
- What Is Oracle Processor Licensing? CoreOracle processor licensing definition: licensed by physical core multiplied by core factor 0.25 to 1.0. Intel x86 factor is 0.5. Drives most Oracle audit.
- What Is Per-Seat Pricing? Definition and SaaS TrendsPer 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.
- What Is Per-Token Pricing in AI?Per token pricing definition: AI APIs bill per million input and output tokens. GPT-class models land at 2 to 15 dollars per million in, 8 to 75 dollars per.
- What Is Per-Transaction Pricing?Per transaction pricing definition: software billed per discrete event, API call, or document. Common in payments, B2B integration, and ServiceNow Now Assist.
- What Is Premier Support? OraclePremier Support definition: top tier vendor support with active patches and 24x7 access. Oracle 22 percent, SAP Enterprise 22 percent, Microsoft Unified 9 to.
- What Is Ramp Pricing? Definition and MechanicsRamp pricing definition: scheduled increases in committed spend across a multi year contract. Vendor ramps typically rise 30 to 80 percent year over year in.
- What Is Renewal Uplift in SaaS? Benchmark RangeRenewal 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? Pricing BenchmarkWhat is RISE with SAP: a 5 year S/4HANA Cloud bundled subscription with infrastructure and BTP credits, typically 18 to 32 percent off list.
- What Is Shelfware? Definition and How to Identify ItShelfware definition: licensed but unused software. The average enterprise carries 32 percent shelfware on SaaS contracts, 19 percent on perpetual licenses.
- What Is Software Asset Management (SAM)? DefinitionSoftware asset management definition: practice of tracking software entitlements vs deployment. The average SAM program returns 14 to 22 percent license.
- What Is Street Price Software? DefinitionStreet price software definition: the median negotiated price actually paid across comparable deals. Sits between list and net price as the procurement.
- What Is Subscription Pricing? DefinitionSubscription pricing definition: time-bound, recurring fee for software access. Enterprise SaaS terms run 1 to 5 years, 7 to 12 percent annual uplifts standard.
- What Is Sustaining Support Oracle? DefinitionSustaining Support definition: Oracle support tier that continues at 22 percent of license fee but stops new patches, certifications, and tax updates.
- What Is TCV Software? Total Contract Value DefinedTCV software definition: the full committed contract value across the entire term, including services and one time fees. The headline number on most sales.
- What Is Tiered Pricing? Definition and BenchmarkTiered pricing definition: discount or feature levels triggered by volume. Cross-tier optimization recovers 4 to 9 percent of total contract value at renewal.