CIO Playbook: Managing ISV AppExchange App Licensing in Salesforce

Organizations leveraging Salesforce often extend its functionality by installing third-party applications from the Salesforce AppExchange. These Independent Software Vendor (ISV) apps – such as DocuSign and Conga, and hundreds of others – bring powerful capabilities but also introduce separate licensing agreements, costs, and management challenges.

This section provides an advisory playbook on governing ISV app licenses in Salesforce. It offers practical guidance for CIOs, enterprise architects, procurement officers, and IT Asset Management (ITAM) teams to ensure these AppExchange apps deliver value without creating compliance or budget risks.

The goal is to help IT leadership manage ISV app licenses with the same rigor as core Salesforce licenses, through clear inventory tracking, proactive governance, effective negotiation strategies, and integration into broader IT asset governance.

Separate Licensing for AppExchange ISV Apps

Independent Licenses: Each AppExchange application comes with its own licensing terms and fees, separate from your Salesforce licensing.

In practice, installing an ISV app usually means maintaining two parallel subscriptions: one with Salesforce for the core platform and one with the ISV for their product. For example, if you use DocuSign for Salesforce, you’ll pay Salesforce for your CRM users and pay DocuSign for your e-signature user licenses. Your Salesforce contract does not cover the cost of the AppExchange app.

Salesforce & ISV Dual Requirements: Nearly all third-party apps on the AppExchange require that the user have both an underlying Salesforce license and the ISV’s license to function. In other words, a Salesforce user needs to be licensed separately to use the add-on app. (Rare exceptions exist in an OEM licensing model, where an ISV app can run on the Salesforce platform standalone, but those are specialized cases beyond typical enterprise use.)

For most organizations, plan for each AppExchange app as an additional contract on top of Salesforce, with its terms, pricing, and support structure. The ISV will typically have a separate agreement and bill your company directly, even though the app is accessed within your Salesforce environment.

Example – DocuSign & Conga: If a sales rep uses Salesforce and also needs DocuSign eSignature and Conga Composer for document generation, that single user may consume one Salesforce license, one DocuSign license, and one Conga license, all billed independently.

This stack increases the per-user cost and must be budgeted accordingly (e.g., Salesforce ~$150 per user per month + DocuSign ~$20 per user + Conga ~$XX per user, etc., totaling the sum). Each vendor will have different usage metrics – DocuSign might license per user or number of documents sent, while Conga typically licenses per user.

The key point for CIOs is that AppExchange apps are add-ons, not inclusions: they expand Salesforce’s capabilities but come with their license entitlements and fees that need to be tracked.

Inventory of AppExchange Apps and Subscription Terms

Maintain a Centralized App Inventory: It is crucial to maintain an up-to-date inventory of all AppExchange apps installed in your Salesforce orgs, along with key information on each.

This inventory should include the app name and vendor, a brief description of its purpose, the number of licenses or usage allotments purchased, current assignment or usage levels, contract start and end dates, renewal dates, and the commercial terms (such as cost, payment frequency, etc.).

CIOs should task the Salesforce admin team or ITAM team with producing a report of all “installed packages” in Salesforce on a regular cadence. Every ISV app in use should be logged in an asset register just like any other enterprise software.

This prevents the common issue of “forgotten” subscriptions and enables enterprise architects and IT asset managers to see the full picture of Salesforce-related tools in use.

Track Subscription Details: For each ISV app, record the licensing model and metrics. Different apps use different licensing schemes: some are priced per user, others by usage (e.g., the number of documents, data volume, or transactions), or by organization or edition.

Note if the subscription offers tiers of usage and any overage policy (for example, DocuSign might allow a certain number of envelopes per year per license, with additional charges if the limit is exceeded).

Document renewal terms – is it auto-renewal or manual, and how far in advance must notice be given to cancel or adjust license counts? Mark renewal dates on a calendar to avoid last-minute surprises. Ideally, align or at least be aware of how these dates relate to your Salesforce contract renewal dates.

Many organizations choose to co-term major ISV renewals with their Salesforce annual renewal for convenience. However, if that’s not possible, maintaining a schedule of all contract end-dates is essential.

Include Dependencies and Integration Notes: In the inventory, capture any dependencies each app has. For example, an app might require a specific Salesforce edition or feature (it may only work on Enterprise Edition or higher, or it might need Salesforce API access enabled).

If an app is mission-critical, note its dependency on Salesforce data or other systems. This helps in risk assessment – if you ever consider dropping a Salesforce feature or if a Salesforce license type changes, you can quickly see which AppExchange apps would be impacted.

Also, note if the app has any technical or data dependencies (e.g., does it store data outside of Salesforce that might raise compliance concerns).

Example Inventory Entry:

This kind of table can be maintained internally to give a one-glance view of all AppExchange app commitments. Procurement and ITAM teams should regularly update this inventory as new apps are installed or retired, and use it to plan renewal budgets.

Governance and License Tracking

Establish Governance for App Installations: A common pitfall is treating AppExchange installations too casually. To avoid “app sprawl” or unsanctioned usage, establish an approval process for any new AppExchange app installation.

Just as new enterprise software goes through an architecture review and security assessment, business teams require clearance from IT (architecture, security, and procurement) before an administrator installs a managed package from the AppExchange. This governance step ensures that licensing implications are considered upfront.

It can prevent scenarios where a department initiates a free trial of an app, which later converts into a paid subscription without proper oversight—a classic shadow IT pattern. By involving enterprise architects early, you also ensure the app doesn’t duplicate existing functionality or violate data policies.

License Assignment and Enforcement: Once an ISV app is deployed, control who can access it. Most managed packages provide a license management screen in Salesforce (under Installed Packages> “Manage Licenses”), where admins can assign the app to specific users up to the number of licenses purchased. Implement a process for granting and revoking these app licenses similarly to how you manage Salesforce user licenses.

For example, when an employee leaves the company or changes roles, not only should their Salesforce access be removed, but also their AppExchange app access (to free up that license for reuse and stay compliant). Regularly compare the number of active users of each app in Salesforce with the number of licenses you have purchased.

Never exceed your provisioned license count for an app. While some apps will technically prevent you from assigning more users than are licensed, others may not actively enforce this, leaving you reliant on the honor system and vulnerable to compliance issues.

Conduct internal license audits to identify discrepancies, such as users with access to an ISV app without a corresponding paid license, or licenses purchased but never assigned (wasted). Addressing these issues early ensures you’re not unintentionally out of compliance or paying for unused capacity.

Monitor Usage and Spend: Beyond user counts, keep track of usage metrics for apps that charge based on usage. For instance, if an app has a monthly transaction limit or document quota, set up alerts or reports to monitor usage against those limits.

This can often be done via the app’s dashboard or by pulling data from the vendor. By monitoring, you can proactively purchase additional capacity or negotiate a higher tier before hitting a cap and incurring expensive overage fees. Likewise, identify under-utilization: licenses assigned, but the feature isn’t being used.

According to Salesforce license management best practices, improper allocation and underutilization of licenses drive up costs and waste resources. If only 30 out of 50 purchased licenses for an app are actually in use, consider re-harvesting or downsizing at renewal. Regular reviews, such as quarterly, of “licenses purchased vs. licenses used” for each app can reveal opportunities to optimize and reduce waste.

Prevent Untracked Spend: Governance should extend to financial tracking. Ensure all procurement of AppExchange apps, even if initiated by business units, goes through a centralized process so that spend is tracked. It’s easy for a small team to swipe a credit card for a cloud app that integrates with Salesforce, bypassing procurement.

To combat this, integrate AppExchange apps into your ITAM and Finance tracking systems. If your company uses a purchase order system or SaaS management tool, every AppExchange subscription should be a line item in that system.

This makes “hidden” spending visible. In addition, classify these apps properly in budget terms, often as part of the Salesforce ecosystem expense. CIOs should insist on a single view of Salesforce ecosystem costs, which includes Salesforce licenses and third-party add-ons, to get an accurate picture of the total cost of the CRM platform​.

License True-ups: Plan how you will handle true-ups or mid-term expansions. If an urgent project suddenly requires 20 more seats of a given app, have a procedure in place. Perhaps you negotiate upfront volume flexibility with the vendor, or you know the per-unit cost to add more.

Avoid scenarios where teams unilaterally add users beyond what’s licensed and sort it out later – this can lead to retroactive charges. Instead, bake into your governance policy that any increase in usage must be approved and documented with the vendor.

Ideally, the vendor should issue a formal add-on order (even if prorated) so your license counts stay in sync legally. Keeping these controls tight will ensure you don’t accumulate “shelfware” or surprise bills.

Negotiation Strategies for ISV App Licenses

Direct vs. Through Salesforce: When it comes to purchasing or renewing an ISV app, you generally have two avenues:

• Negotiate Directly with the ISV Vendor: This means working with the ISV’s sales team to buy licenses. You’ll sign a contract directly with, say, DocuSign or Conga.
• Negotiate through your Salesforce Account Team: In some cases, Salesforce can act as a reseller or facilitator for AppExchange apps, bundling the ISV product with your Salesforce licensing deal. This might happen during a large Salesforce renewal or Enterprise License Agreement discussion, where the Salesforce rep offers to include the third-party product as part of a single package or order form.

Both approaches have pros and cons. Direct negotiation allows you to have a direct relationship with the software provider, which can be useful for support and may result in more tailored contract terms. The ISV may be more willing to negotiate usage flexibility or custom terms since you are a direct customer.

On the other hand, purchasing via Salesforce (or with Salesforce’s involvement) can leverage the size of your overall Salesforce deal. If your Salesforce renewal is due, your Account Executive (AE) might be very motivated to increase the total contract value by adding partner products.

Salesforce AEs often get quota credit or incentives for influencing AppExchange partner sales, so they have a stake in helping broker a deal. In practical terms, this can mean they’ll push the ISV for a better discount on your behalf, or Salesforce might discount some of its licenses if you agree to add the ISV product.

This bundling can simplify procurement (with one invoice or at least synchronized termination) and possibly yield cost savings due to the larger negotiation context.

Bundling for Better Pricing: Leverage the timing of your Salesforce negotiations to also negotiate ISV apps. For example, if you’re renewing Salesforce for a three-year term, that’s an excellent time to also negotiate a three-year deal for key add-on apps, such as DocuSign.

By bundling the discussions, the Salesforce rep can help advocate for a competitive ISV price, as it contributes to the overall deal’s success and the rep’s quota.

There have been cases where customers secured double-digit percentage discounts on an AppExchange product by signaling that their purchase was contingent on getting a favorable package deal. For instance, a company might tell Salesforce and the ISV: “We’ll commit to 500 DocuSign seats as part of our CRM renewal if we get a bundled discount across the board.”

The Salesforce AE may then coordinate with DocuSign to present a proposal that offers, say, 15% off DocuSign’s list price and maybe also a slight improvement on the Salesforce side as a reward for the larger contract. In another scenario, a customer looking at Conga for document generation could ask their Salesforce representative to include Conga licensing in the annual Salesforce quote.

The representative, eager to increase the total sale, might use Salesforce’s partner reseller arrangement to bundle it.

The result could be a single contract (or at least synchronized contracts) with price advantages. Negotiating via Salesforce does not preclude haggling – even the prices of these third-party apps are negotiable; nothing is a fixed rate.

Just as Salesforce’s prices are highly negotiable based on volume and deal size, ISVs often have flexibility, especially for enterprise customers and multi-year commitments.

Negotiation Tips: Whether you go directly or through Salesforce, consider these tactics:

• Research Benchmark Pricing: Understand typical pricing for the app. Many ISVs have tiered pricing plans published or can provide quotes for different volume levels. Knowing if an app generally costs $20 per user per month versus $50 per user per month empowers your negotiation. Also, find out if competitors or alternative apps exist – this gives you leverage to ask for a better deal, or you might consider switching.
• Bundle Multiple ISV Apps if Possible: If your organization plans to adopt several AppExchange solutions (e.g., an e-signature tool, a CPQ tool, and a data backup tool), negotiating them around the same time can create leverage. Even if they are from different vendors, your Salesforce account executive (AE) can help orchestrate a larger deal. In some cases, Salesforce has SELA (Salesforce Enterprise License Agreements) or volume purchase agreements that also encompass add-on ISV products. A larger combined spend can unlock higher discount tiers.
• Contract Length and Flexibility: Just like with Salesforce, committing to a longer term (e.g., 3-year subscription) for an ISV app can often secure better pricing locked in for that period. However, ensure you have flexibility (such as the ability to adjust down users at renewal or carry over unused volume) to avoid overpaying if your needs change. Negotiate caps on price increases for renewals, even in multi-year contracts (e.g., no more than a 5% increase per year).
• Co-Terminus Renewals: If you do bundle via Salesforce, try to align the ISV app’s renewal with your Salesforce contract end date. This gives you maximum leverage to renegotiate both together next time. If bought separately, you can still aim to co-term the ISV’s renewal to a convenient date (many vendors will prorate a few months to align with a fiscal year or another key date).
• Support and SLAs: Clarify how support will work in a bundled scenario. Often, you’ll get support from the ISV directly. However, ensure that if you purchase through Salesforce, you’re not forced to route all issues through Salesforce support, as this could slow things down. Ideally, the contract should state that you can work directly with the ISV support team for technical issues, while Salesforce handles billing. Make sure there is no confusion about responsibility.
• Use of Independent Advisors: Consider using a third-party licensing advisor or negotiator to assist, especially if the ISV contract is of high value. Independent licensing experts, such as Redress Compliance, can provide insights into typical discount ranges and contractual pitfalls, and they can support your team in negotiations to secure the best terms. Their knowledge across many clients can be a force multiplier when dealing with both Salesforce and ISV vendors.

Example – Bundling DocuSign: A CIO negotiating a Salesforce renewal noted that the company also needed to expand DocuSign usage. Instead of handling them entirely separately, they informed the Salesforce AE that an attractive DocuSign offer would influence the overall CRM renewal. The Salesforce AE, eager to keep the customer happy (and increase the deal size), coordinated with DocuSign’s sales team.

Together, they crafted a deal: the customer received an improved discount on DocuSign’s enterprise plan, and in exchange, the Salesforce AE was able to count the DocuSign contract value toward their quota. In this win-win, the customer simplified negotiations and got better pricing than if they had less purchasing power alone.

The key is to make the connection explicit – let Salesforce know which third-party deals are on the table, so they see the full picture of your ecosystem spend. Often, they can pull the right strings internally, since Salesforce has partnership arrangements. Salesforce usually takes a revenue share from ISV sales, so they benefit when you buy an AppExchange product as well.

Risks of Unmanaged ISV Licensing

Compliance Risks: Unmanaged or poorly tracked ISV app usage can lead to compliance issues with the vendors. If users are accessing an AppExchange application without an appropriate license, your organization violates that software’s terms.

While Salesforce itself doesn’t police your third-party license compliance, the ISV vendor certainly can – many ISVs have the ability to audit usage through the Salesforce License Management App or their telemetry.

If an audit finds that you are overusing licenses, you may be liable for back payments or penalties. For example, if you purchased 100 seats of Conga but 120 users have been enabled in Salesforce (perhaps due to an admin oversight), Conga may require you to purchase the additional 20 seats retroactively.

Aside from license counts, compliance also means using the app in permitted ways – for example, using a “development/test” free license for production purposes would be a violation. Regular internal audits should be conducted to ensure alignment between entitlement and usage, as mentioned earlier.

Catching and correcting issues internally (trueing up licenses or removing access) will avert formal compliance disputes. Also, ensure that the terms of use (such as geography restrictions or user type restrictions) are adhered to – for instance, some ISV licenses may be named-user only (not shared accounts) or limited to employees versus external community users. These details need governance to avoid inadvertent breach.

Budget Overruns and Cost Creep: Without active management, spending on AppExchange apps can spiral out of control. It often starts small – a team adds a $10 per user per month app here, another $20 per user app there – but over time, as more users adopt it or more apps are added, the cumulative cost becomes significant. If these subscriptions are not budgeted centrally, you may find that you’ve spent tens or hundreds of thousands of dollars more than anticipated by mid-year.

One risk is over-provisioning: buying more licenses than needed or keeping licenses allocated to users who don’t need them. As noted, overprovisioning and underutilization directly translate to wasted budget​. Another risk is usage-based cost creep: an app might charge overage fees if you exceed certain limits (e.g., an analytics app might start charging for extra data storage or API calls beyond a threshold).

Without monitoring, those fees will quietly accumulate. The lack of consolidated visibility (if each department handles its apps) compounds this – finance may only see fragmented expenses and not realize the total cost of AppExchange add-ons across the organization. The CIO should consider requiring that all AppExchange license expenses be routed through the IT budget or at least reported to centralize visibility.

Unmanaged spend can also ruin ROI calculations; you might be measuring Salesforce ROI but not accounting for the fact that for every $1 on Salesforce, you’re spending $0.50 on add-ons. Taking that holistic view prevents underestimation of operating costs.

“Shadow IT” and Security Concerns: Apps on AppExchange that are adopted without proper governance effectively become a form of shadow IT. Even though they live inside Salesforce, if IT leadership isn’t aware of an app, it poses risks. There’s the financial risk we discussed, as well as potential data security and compliance risks. Every AppExchange app has access to some part of your Salesforce data and environment.

Suppose a department installs one without a security review. In that case, you might be exposing data to a third party without conducting due diligence. Although Salesforce’s security review process for AppExchange apps provides some baseline assurance, it’s not a substitute for your review of data handling and compliance, especially for regulations like GDPR or HIPAA.

Operational Dependency Risk: As you rely on more third-party apps, you also need to manage the risk that an app may become unsupported or that its vendor changes its terms. If an ISV app is deeply embedded in your business process (e.g., contract generation through Conga), any licensing issue (such as a contract dispute or delayed renewal payment) can directly impact operations. Sales might be unable to generate proposals if the Conga license lapses.

There’s also the risk of vendor lock-in or price increases: an app might integrate so tightly that switching is painful, giving the ISV leverage to raise prices. CIOs should be aware of which business capabilities depend on third-party add-ons and have contingency plans in place.

This might involve maintaining good relationships with those vendors and monitoring their product roadmaps and financial health, so you aren’t blindsided by an acquisition or bankruptcy that leaves the product in limbo.

Integrating ISV Apps into IT Asset Governance

Policy Integration: To effectively manage AppExchange apps, integrate their oversight into your existing IT asset management (ITAM) and governance frameworks.

This means that the policies you have for software asset management (e.g., maintaining a CMDB or asset register, performing regular reconciliations, managing vendors) should explicitly include cloud marketplace apps, such as those from Salesforce’s AppExchange.

Publish guidelines internally that make it clear that AppExchange apps are subject to the same approval and tracking procedures as any enterprise software purchase. By doing so, you formally recognize these apps as part of the IT portfolio.

Many CIOs update their IT asset policies to mention that “all SaaS applications, including third-party applications installed within platforms like Salesforce, must be approved and tracked by ITAM.” This sends a message that even if a tool is obtained through a SaaS marketplace, it is not exempt from oversight.

ITAM Process Adjustments: Work with your ITAM team to incorporate data on AppExchange apps into their processes:

• Include AppExchange license counts and costs in your regular license audits and true-up exercises. If the ITAM team does a semi-annual true-up of software usage, Salesforce add-ons should be in scope. This will help catch unused licenses to reclaim and ensure compliance with entitlements.
• Leverage any tools at your disposal; for instance, if you use a SAM tool or SaaS management platform (such as Flexera, ServiceNow SAM, or SaaS discovery tools), configure it to ingest data from Salesforce. Some tools can connect to Salesforce APIs to pull information about installed packages and license assignments. If not, you can export a manual report from Salesforce and feed it into your asset database.
• Renewal Management: Your ITAM or Vendor Management Office should treat each ISV app as a vendor contract to diarize and manage. Well in advance of renewals (e.g., 90 days out), they should trigger a review. This review would involve checking current usage against what’s contracted (are we underutilizing or overutilizing?), determining if the business still derives value, and then deciding whether to renew, cancel, or renegotiate. This process ensures proactive decisions rather than last-minute renewals. It also enables looking at the market – perhaps there are new competitors to that app which could be considered, or maybe Salesforce has built-in new features that reduce the need for it.
• Governance Board Reviews: Consider including a review of AppExchange apps in periodic meetings of your IT governance board or architecture review board. For example, quarterly, present a dashboard of all third-party apps in the Salesforce environment: what they do, how much they cost, and any issues, such as upcoming renewals or compliance flags. This keeps leadership aware and provides a forum to decide on any rationalization (e.g., “Do we need two survey apps from AppExchange, or can we standardize on one?”).

Training and Awareness: Educate key stakeholders, particularly Salesforce administrators, business power users, and procurement staff, about the importance of managing these licenses. Sometimes, an admin or a developer might install a package for testing without realizing the licensing implications.

By raising awareness that “if it’s on AppExchange and not free, we need to be aware of it,” you’ll get more cooperation. It helps to provide a simple intake form or checklist for any new AppExchange app request that covers licensing requirements, data access, and other relevant details.

For existing apps, ensure there is an owner for each in the organization (e.g., the Sales Operations manager is the business owner for Conga; the legal department might own an e-signature app, etc.) who can liaise with ITAM. These owners should be part of the governance loop, confirming that the app is still needed and that usage is right-sized.

Leverage Vendor Management Expertise: If your organization has a Vendor Management Office (VMO) or sourcing specialists, involve them in major AppExchange vendor relationships. They can apply the same vendor scorecard evaluations (e.g., performance, support quality, financial stability) as they do for larger software suppliers.

This ensures the ISVs are not ignored in vendor risk assessments. For critical apps, include them in disaster recovery and continuity planning. For example, if an app is vital and cloud-only, consider having export options for data or alternative ways to function if the app is down. In essence, embed ISV apps into all lifecycle stages of IT asset management – from request to procurement, deployment, monitoring, renewal, and eventual retirement.

Recommendations and Action Plan for CIOs

1. Establish Ownership and Inventory: Assign clear ownership for managing AppExchange app licenses. The CIO should designate the ITAM team or a specific Salesforce product owner to maintain the inventory of all AppExchange apps, as detailed above.

Start with a full audit of your Salesforce orgs to document every installed app and its licensing status. If you find apps that nobody “owns,” immediately assign them to a business owner or consider uninstalling if they are ot providing value.

2. Implement an AppExchange Governance Policy: Create a governance policy that requires approval for any new AppExchange app installation. Communicate this policy across IT and business departments.

The policy should require a review of licensing terms, security, and overlap with existing tools. Tie the installation process to this policy (for example, admins must obtain a written sign-off from the governance board or architecture review team before proceeding with a production installation).

3. Centralize Contract and Renewal Tracking: Ensure all ISV app contracts are logged in a contract management system or calendar. Align responsibility so that procurement or ITAM is alerted 3-6 months before renewals. This provides time to assess usage and negotiate. For upcoming renewals, conduct a mini-internal audit of usage vs. entitlement for each app: identify unused licenses that can be dropped and overuse that needs addressing.

Engage the business owner to confirm the app’s continued necessity and gather any new requirements (for example, do they need more licenses, or could some be removed?). This information will help you make an informed decision about your negotiation or renewal.

4. Proactively Manage License Allocation: Institute a quarterly or bi-annual routine where Salesforce admins and ITAM analysts reconcile AppExchange license assignments. Leverage Salesforce reports or the ISV’s license management interface to list all users assigned a given app. Compare it to HR records or actual active user counts. Remove or reallocate any licenses not in use.

Report these findings to the CIO or relevant IT lead – for example, “Q2 review shows 10 out of 60 DocuSign seats were unused; we removed those assignments and will consider reducing licenses at renewal.” This maintains a continuous optimization mindset and prevents the long-term accumulation of shelfware.

5. Integrate ISV Apps into IT Financial Planning: When planning IT budgets, include a line item for “Salesforce AppExchange Add-ons.” Roll up the costs of all relevant ISV apps. This ensures executives see that, for instance, Salesforce isn’t just the $1M/year CRM cost, but there’s another $200K in AppExchange apps supporting it.

Visibility at this level will encourage a proactive approach to managing costs. Also, track the ROI of each app – are we getting business value commensurate with its cost? Use this in renewal decisions: if an app isn’t delivering enough value, consider replacing or discontinuing it.

6. Leverage Negotiation Opportunities: Treat AppExchange license procurement with the same rigor as a major software negotiation. Don’t accept list prices – engage vendors in discussions about discounting, especially if you’re buying for a large user base or over a multi-year term. Time your negotiations strategically. If your Salesforce renewal is approaching, consolidate your needs and negotiate Salesforce and ISV deals simultaneously for maximum leverage.

For each major ISV app, decide whether to pursue the deal directly or loop in the Salesforce AE – evaluate which path is likely to yield a better result (you can even ask both for quotes to compare). Use any leverage you have, such as references, willingness to be a case study, or volume commitments, to improve pricing and terms.

7. Negotiate Contract Protections: In your ISV agreements, negotiate protections similar to what you’d do with Salesforce: include caps on annual price increases, rights to reduce license counts at renewal (or a percentage of them if not all), and clarity on how overage charges work (maybe negotiate a grace on occasional overages or an option to true-up at a pre-negotiated rate).

Ensure the contract includes appropriate data security and compliance clauses (aligned with your company’s standards), as these apps will handle your Salesforce data. If you’re signing through Salesforce (as a reseller), make sure the order form references the ISV product and that you receive a copy of the ISV’s terms – avoid any “blind” agreements where you haven’t seen the actual ISV terms you’re bound to.

8. Monitor Vendor Performance and Usage Post-Deployment: After an app is in use, set KPIs to measure its effectiveness (e.g., time saved, faster deal closure if it’s an e-sign app, etc.). This will help justify the renewal or identify if the app isn’t pulling its weight. If the app is critical, maintain regular contact with the vendor (e.g., quarterly business reviews) to stay informed about their product changes and licensing updates.

Be cautious about any new features the vendor may upsell – ensure you truly need them before adding to the contract. Similarly, watch out for “scope creep” in usage. If one department starts using an app licensed only for another (e.g., marketing users using a sales-paid tool), address it by either properly expanding the license or curbing the cross-use.

9. Engage Independent Licensing Experts: For complex negotiations or audits, consider bringing in independent software licensing experts, such as Redress Compliance. These advisors do not sell software; their role is to ensure you are optimally licensed. They can conduct a license audit on your AppExchange usage to identify any compliance gaps or inefficiencies, and they can support negotiations by providing benchmark data and strategies gleaned from other clients.

For a CIO, having a third-party validate that you’re not overspending (or that you’re meeting contract terms) provides peace of mind. An expert can also advise on tricky situations, such as reconciling an ISV contract term with your Salesforce master agreement, or what to do if a vendor is acquired and the new owner changes licensing models. Engaging such expertise can often pay for itself in the savings gained or compliance risks avoided.

10. Continuous Improvement and Review: Make managing ISV licenses part of your ongoing IT improvement. After each renewal or major negotiation, debrief on what went well and what surprised you. Update your internal processes accordingly. For example, if you discover an app is heavily underutilized only when preparing for renewal, put better usage tracking in place earlier in the cycle. If an audit (internal or external) uncovered that some users had access without licenses, tighten the assignment process.

Additionally, stay informed – the Salesforce ecosystem evolves rapidly, and licensing practices are subject to change. Follow relevant communities or publications, such as Salesforce customer success forums, licensing blogs, and Gartner research, for updates on AppExchange trends. This will help you anticipate new challenges or opportunities, like Salesforce introducing a new program for ISV bundles or an ISV changing their pricing model.

Do you want to know more about our Salesforce Advisory Services?

Please enable JavaScript in your browser to complete this form.

Name *

Email *

Company

Message *

Submit