Finding what nobody adopted, timing the conversation, and negotiating the estate as one. Three knowledge checks along the way, and 4 clips from a senior licensing analyst.
This is a taught session, not a talking head. The instructor works through analyst grade slides, and three times the video stops on a question with four options on screen. Pause, commit to an answer, and the next slide explains which option is right and why each of the others is wrong. 4 times in the session the frame splits and a senior licensing analyst gives the view from inside real SAP negotiations, and the instructor picks the clip apart when the slides return.
The full narration of this session, section by section, for reading and reference. Guest analyst clips are marked.
Welcome back. Session thirty, and this one closes module six. Everything in this module has been a product: RISE, GROW, BTP, SuccessFactors, Ariba, and the tail. Today is the thing all of them have in common, which is that you re-buy every one of them on a fixed date. That is the difference between a subscription and a licence, and it is the whole reason cloud negotiation feels different. Today: where shelfware comes from and how to evidence it, how to measure adoption in a way that survives a vendor conversation, the calendar that decides your position before any number is discussed, and where leverage actually comes from. Three knowledge checks. Let's begin.
Five objectives. First, find the shelfware, meaning the five places unused capacity hides in a cloud estate and how to evidence it before you argue about it. Second, measure adoption per metric, because logins prove nothing on an entitlement metric and each metric needs its own kind of evidence. Third, run the calendar rather than the quote, since notice periods and start dates decide your position long before anybody discusses a number. Fourth, know where leverage comes from, which is not spend, it is a credible alternative, evidenced non adoption, and time. And fifth, negotiate the estate, because four agreements taken into one conversation is a materially different negotiation from four taken separately.
Four things to frame it. One date: the price is negotiable at the renewal and effectively fixed everywhere else in the term. Uplift by default, because where no cap was agreed the quote arrives with an increase and the burden of argument is entirely yours. Shelfware renews, since unused modules re-buy themselves silently when nothing in the process asks whether they were used. And late is expensive, because arriving inside the notice window means negotiating with no alternative and no time. Let me put the whole thing more directly, because this is the point of the session.
Guest analyst clip.
The renewal is the negotiation. That is the sentence to take from this session, and everything else today is mechanics in support of it. And notice the failure mode he described is not incompetence, it is drift: each individual renewal was approved by somebody applying a reasonable test, and the cumulative result is an agreement nobody chose. So, where does the waste actually come from?
Four sources, and nobody buys shelfware deliberately. The bundle: modules included to make a package price work, never scoped, never implemented, renewed with everything else. Phase two: licensed for a rollout that slipped or was cancelled, so the project stopped and the subscription did not. Default entitlement, which is a module entitled to the whole population when a fraction of it will ever open the product, and that is session twenty seven's point arriving in a different form. And acquisitions, where you inherited an estate with overlapping products and both subscriptions kept running right through the integration. Not one of those is a decision anybody would be blamed for, and that is exactly why they survive. No single choice was wrong, so no single person owns the outcome, and it renews quietly for years.
So measure it, and measure it in a way that survives contact with your account team. Five rules. Per user modules: active users against entitled users, which is the one case where login data is the right evidence and the one case people already collect it. Per employee modules: transactions per module rather than logins, because entitlement counts regardless of use, so the question is whether the module does any work at all. Volume metrics: actuals against committed, so twelve months of expense reports, orders or documents against the number you signed up to. Consumption models: burn rate against balance, which is the credits question from session twenty six, so what you drew down and what expired unused. And one number per module, dated and sourced, because a figure the vendor can check beats an assertion they can dispute, and it changes the tone of the entire conversation.
First knowledge check. SAP offers thirty percent off a module your people use at five percent adoption. What is that offer worth? A, a thirty percent saving on that line. B, very little, because you are still buying capacity nobody uses. C, it depends on the list price of the module. D, a good deal, provided adoption grows later. Pause here and pick an answer before you continue.
B. A discount on shelfware is a smaller amount of waste rather than a saving, and it is the single most effective way a vendor has of keeping an unused module inside the agreement for another term. A prices the concession as though the spend were justified in the first place. C is arithmetic on a line that should not exist. And D is the phase two argument again, which is worth taking seriously only when somebody will own an adoption plan with a date attached to it. The right response to a discount offer on a module at five percent adoption is a single question: what is the price with that module removed? Ask that first, and negotiate the remainder afterwards.
Now the calendar, and five points, because the renewal starts long before the quote arrives. Eighteen months out, decide the shape: what stays, what goes, what changes metric, and on a large estate that is a programme rather than a meeting. Twelve months out, build the evidence, so adoption per module, actuals against commitments, and the alternative you would genuinely consider. Nine months out, open the conversation yourself, with your agenda, because if the vendor opens it the agenda is theirs. Know the notice date rather than just the end date, since a ninety day window that passes unnoticed auto renews the entire term. And their year end is your information, because quarter and fiscal boundaries move what a vendor can approve, so know the dates and use them without building your plan around them. That fourth point deserves its own minute.
Guest analyst clip.
Fifteen minutes of work. I would go further and say that if you take one action from module six, make it that one, because it is the only item in this entire session that costs nothing, requires no negotiation, and protects everything else you are trying to do.
Second knowledge check. Your renewal quote lands sixty days before the term ends, and your notice period is ninety days. Where are you? A, in good shape, since there is still time to negotiate the number. B, already renewed in practice, because the notice window has closed. C, entitled to an extension while the quote is reviewed. D, able to terminate, since the quote arrived late. Pause here before you continue.
B, and this is the calendar point with a price tag on it. Once the notice date passes, the term renews on its own terms and your only remaining option is to ask nicely. A confuses having time to talk with having the ability to leave, and those are not the same thing at all. C and D both assume an obligation on the vendor to quote by a particular date, which almost never exists in the agreement. And I want to be fair here: nothing improper has happened. A quote arriving inside the notice window is ordinary commercial practice, and the defence is entirely on your side of the table, which is to diarise the notice date and start before it matters.
So where does leverage actually come from? Five sources. A credible alternative, because price responds to the option of leaving rather than to the size of the bill, so cost a real migration even if you never intend to run it. Evidenced non adoption, since a number the vendor can verify is hard to argue with, which means usage per module across twelve months, dated and sourced. Time, because concessions need approval and approvals need weeks, so start eighteen months out and keep the notice date visible. Estate scale, where one conversation covering four agreements is worth more than four conversations, so align the dates or bridge the shortest to reach the largest. And something to give, because a term extension or a reference costs you far less than cash, so decide in advance what you are willing to trade. Notice what is not on that list: spend. Let me take the first row properly, because it gets misunderstood.
Guest analyst clip.
Either answer is useful, and not knowing is the only bad outcome. That is the right way to think about it, and it takes the bluffing question off the table entirely. You are not preparing a threat, you are removing an unknown, and the work is the same either way.
Right, what to put on the table. Five asks. Remove what is not used, so ask for the price without the module rather than a discount on it, and start there before any other number. Cap the uplift, meaning a ceiling on the annual increase for the whole term, which is the most valuable term in a cloud agreement because it pays every single year. Re-band the metric, since where volume or spend moved, the band that was right three years ago is not the band you need now. Buy a reduction right, so a defined percentage adjustable at each anniversary tied to a real event, because bounded is achievable where unlimited is not, exactly as in session twenty seven. And co-term deliberately, since aligning renewal dates creates one conversation with real weight, and the bridging term is a cost worth pricing properly rather than a reason to avoid it.
Five traps. Renewing on the same numbers, where last term's volumes carry forward unchecked and a peak year quietly becomes your permanent baseline. Taking a discount on shelfware, where the saving is real, the waste remains, and the module is now locked in for another full term. Missing the notice date, which is entirely avoidable, extremely common, and removes every option you had in a single passing week. Negotiating product by product, so four separate conversations and four separate discounts, none of them carrying the weight of the estate. And no adoption data, because without evidence you are expressing an opinion about value, and an opinion loses to a signed order form every time.
Last knowledge check. You hold four SAP cloud agreements renewing across one year. What produces the best outcome? A, negotiate each one hard on its own merits as it comes up. B, align them and take the whole estate into one conversation. C, concentrate the effort on the largest agreement. D, renew the small ones quickly so you can focus on the big one. Pause here, and think about which one changes what you are negotiating with.
B. Four separate conversations produce four separate discounts, each approved at the level a single agreement justifies. One conversation covering the estate reaches a different approver with a different mandate, and it lets a concession on one product pay for a term on another. A is disciplined and structurally weaker, which is a combination worth watching for generally. C leaves three agreements renewing unexamined. And D actively spends your leverage, because the small agreements are the ones you could most credibly walk away from, so giving them away first is exactly backwards. There is a real cost to B, which is the bridging term needed to align the dates. Let me explain why it is usually worth paying.
Guest analyst clip.
Reaching the person who can change the shape of the deal. So, five things for running the renewal cycle. One calendar with every date, meaning renewal dates and notice dates for the whole SAP cloud estate in a single view, with alerts eighteen months out. Adoption reported quarterly, one number per module, and anything under twenty percent goes on the renewal agenda automatically without debate. A named owner per agreement, who is the budget holder, present at the renewal review, answering for the value rather than the licensing team answering on their behalf. A standing shelfware review twice a year rather than once at renewal, because a module found early can still be adopted properly or dropped deliberately. And decide the alternative in advance: what you would move to, what it would cost, how long it would take, because knowing changes how you negotiate even in the years you stay.
Three sentences. A cloud subscription is re-bought on a fixed date, so the renewal is the only moment the price is genuinely open, and the notice date rather than the end date is what decides whether you still have options when the quote arrives. Shelfware accumulates through ordinary decisions nobody would be blamed for, which is why it needs a standing review with a number attached, and why a discount on an unused module is a smaller amount of waste rather than a saving. And leverage comes from a credible alternative, evidenced non adoption and time, none of which can be assembled in the final quarter, so start eighteen months out and take the estate into one conversation rather than four. That closes module six. Next session opens module seven with the SAP audit: the annual measurement, the enhanced system audit, and what SAP actually looks at.
Homework before session thirty one, about two hours, and it builds directly on the inventory you made last session. One, add the notice dates, so take that inventory and put the notice date beside every renewal date, then find the earliest one, because that is your real next deadline. Two, rank by adoption, one usage number per module, lowest first, and the top of that list is your shelfware conversation. Three, price one alternative, so pick the agreement you are least happy with and cost the move honestly, including the year of disruption. Four, check for a cap, meaning does any agreement in your estate have a capped annual uplift, and if none of them does then that is your ask at the next renewal. And five, name the owners, one person per agreement who will defend it at the renewal review, and ask them now rather than in the meeting.
Five guides, all on redresscompliance dot com. Shelfware across the SAP cloud covers finding the unused capacity and evidencing it before the renewal, which is the first half of today. SaaS renewal negotiation covers the calendar, the asks, and what a good renewal term actually looks like in writing. The SAP cloud portfolio overview maps the whole estate product by product and is the reference document for the whole of module six. Capped uplifts and price protection goes into the term that pays every year, including how to word it. And preparing for an SAP audit is where session thirty one begins, so the annual measurement and what it looks at.
That is session thirty, and that is module six complete. The thing to take away is that the renewal is the negotiation, the notice date is what protects it, and the evidence has to exist before the conversation starts. Next time, module seven opens on the SAP audit. See you then.