Our largest software agreement renewed in March at an increase of just under nine percent, and the first person in my department to hear about it was the colleague who queried the invoice.
The clause was not hidden. Notice of non renewal, ninety days before the end of term, in writing, failing which the agreement continues for a further year at list price plus indexation. We were five weeks past the window by the time anybody asked the question.
I went through the portfolio afterwards. Sixty three agreements above our reporting threshold. Forty one renew automatically. Notice periods range from thirty days to a hundred and eighty, and no two are drafted the same way. And we had never once served notice of non renewal on any of them, which means every negotiation this organisation has conducted took place after the only moment at which leaving was still available to us.
Suppliers know these dates better than we do. Their account managers are measured on them. Ours were in a filing system.
What we do now is deliberately unromantic. There is a renewal calendar built backwards from the notice date rather than the end date, with a named owner per agreement and a start date for commercial discussion six months out. On anything material we serve notice of non renewal as a matter of routine, which reopens the conversation without committing us to go anywhere, and which took two uncomfortable explanations before both sides began treating it as ordinary. Before price is discussed at all, the owner produces an exit assessment describing what moving would genuinely involve, because a renewal you cannot walk away from is not a negotiation. It is an invoice with a meeting attached.
Three renewals last year landed around fourteen percent below the opening position. One supplier was replaced, which mattered less for the saving than for the fact that the rest of that market now knows we are willing to.
We also found two live agreements for which nobody could produce a signed copy.
Commercial leverage in software is not a skill. It is a diary entry somebody has to make twelve months early.
– Serguey Shinder
