Case Study – OpenAI Advisory Services – Enterprise SaaS Provider – Scalable GPT Licensing & 25% Cost Reduction
Background
A U.S.-based enterprise SaaS provider (serving Fortune 500 clients) planned to embed GPT-powered features into its software platform.
The goal was to enable its application to generate intelligent summaries and suggestions for users by calling OpenAI’s models behind the scenes. To offer these AI-driven features at scale, the SaaS firm needed a commercial agreement with OpenAI (or Azure OpenAI) that would allow embedding the AI into its product.
Because this usage would directly affect the company’s service costs and customer pricing, the stakes were high.
The SaaS provider needed an agreement that provided cost predictability and granted the rights to use OpenAI’s outputs within its product – all without incurring runaway fees or legal pitfalls.
Challenges
In initial discussions, the SaaS provider found the standard OpenAI licensing terms limiting and expensive. The draft contract treated each API call as a billable event, without offering significant volume discounts, which threatened the firm’s margins if customer usage spiked.
There was also a lack of clarity on whether the SaaS company could cache or reuse certain AI outputs to reduce calls – the vendor’s terms discouraged it.
Additionally, IP rights language was vague on whether the SaaS firm fully owned the AI-generated content integrated into its product. The provider worried that without explicit terms, it might face restrictions on how it could use or resell GPT-generated outputs as part of its service.
The proposed contract also had a high minimum spend commitment, locking the company into paying for capacity even if customer uptake of the new AI features was slower than expected.
Uncomfortable with these terms, the SaaS firm turned to Redress Compliance for assistance in negotiating a more suitable and scalable licensing arrangement.
How Redress Compliance Helped
Redress Compliance delivered an OpenAI Pricing & Usage Benchmarking Advisory for the SaaS provider, combined with contract redlining focused on usage rights.
First, Redress analyzed the SaaS company’s projected API call volumes across its customer base and showed how the initially proposed pricing would erode the firm’s margins.
Using industry benchmarks, Redress demonstrated to the vendor that a tiered pricing model was essential – as usage grew, the cost per call needed to drop.
They negotiated volume discount tiers and a fair rate card that would automatically take effect as usage surpassed certain thresholds. This ensured the SaaS provider’s cost per user stayed stable even as adoption of the AI features increased.
Next, Redress tackled contract language around output usage and IP. They added clauses clarifying that the SaaS company had full rights to the AI-generated outputs within its platform, allowing it to store, display, and even modify those outputs for its end-users without further permission or fees.
This eliminated any ambiguity about who owned the GPT-generated content used in the SaaS product – it was the SaaS provider (and by extension its customers). To avoid overcommitment, Redress also negotiated a more flexible consumption commitment. Instead of a high annual minimum, the contract was adjusted to a lower initial commitment with the ability to scale up as real usage patterns emerged.
The SaaS firm also gained the right to revisit pricing after the first year, allowing them to adjust the terms if user adoption differed significantly from expectations, rather than being locked in.
Throughout the negotiation, Redress served as the SaaS company’s advocate, backing each request with data and rationale. Ultimately, the vendor agreed to significant adjustments to align the deal with the SaaS provider’s business model.
Outcome and Impact
With Redress Compliance’s help, the SaaS provider secured a licensing agreement that supported its product strategy and protected its economics.
The final contract featured a scalable pricing scheme – volume discounts ensured that as AI feature usage grew among the SaaS firm’s customers, the unit cost of OpenAI’s service dropped accordingly.
This change alone was estimated to reduce the company’s AI spend by about 25% in the first year compared to the original proposal.
The agreement also explicitly granted the SaaS provider rights to all AI-generated content used within its application, eliminating any downstream legal ambiguity and reassuring the SaaS firm’s clients that there were no hidden IP entanglements.
By lowering the minimum spend commitment, the deal gave the SaaS provider breathing room to pilot the new AI features without incurring costs for unused capacity – and the flexibility to increase commitments only when demand increased.
In short, Redress Compliance helped transform a rigid, potentially cost-prohibitive contract into a flexible and mutually beneficial partnership.
The SaaS provider launched its GPT-powered features confident that it had a predictable cost structure and clear control over the AI outputs.
The result: new AI capabilities became a value-add for the SaaS company’s product, driving competitive differentiation, all under a contract that safeguarded the company’s financial and legal interests.
Client Testimonial
“We needed an AI deal that scaled with us, not a one-size-fits-all contract that could sink our margins,” said the COO of the SaaS provider. “Redress Compliance came in with the pricing intel and contract savvy to change the game.
We obtained the volume discounts we required, and they ensured that we own and control all the AI-generated content on our platform. Redress saved us from an agreement that just didn’t fit – now we have one that grows with our business.”
Call-to-Action
If you’re integrating GPT or other AI services into your products, don’t let an unfavorable contract undercut your business model.
Redress Compliance can negotiate pricing and licensing terms that align with your usage, providing you with full control over your outputs. Before you lock in an AI provider contract, reach out to Redress Compliance – we’ll help you secure a deal that fuels innovation on your terms and budget.
Read about our GenAI Negotiation Services.
Read about our other GenAI Negotiation Case Studies.
