Key Takeaways
- Many software contracts renew automatically if notice is not given on time.
- The specific contract always governs the applicable term and notice period.
- Contract data only becomes a basis for decision-making when combined with license quantities and actual usage.
- Software Contract Management does not replace a legal review of contract clauses.
What data belongs in Software Contract Management?
Software Contract Management includes all details required to make an informed renewal decision:
- Vendor, product, and contract type
- Start date, term length, and end date
- Notice period and renewal rule
- Price, billing interval, and license quantity
- Responsible owner within the company
Why is Software Contract Management important for small and medium-sized businesses?
Software Contract Management is important because contracts in small and medium-sized businesses are often signed by individual teams and filed away in emails or folders. Without a central overview, notice periods pass unnoticed and contracts renew under old terms or with too many licenses.
Example: Software Contract Management in practice
Example: A company with 80 employees holds 25 software contracts. An annual contract for a collaboration tool covering 70 licenses at 12 euros per month has a three-month notice period. The overview shows only 52 used licenses. Before the notice deadline, the team negotiates down to 55 licenses and saves 2,160 euros per year.
Software Contract Management vs. License Management
| Aspect | Software Contract Management | License Management |
|---|---|---|
| Subject | Contract with term, notice deadline, price, and renewal | Licenses with quantity, assignment, and usage rights |
| Key question | By when do we have to decide? | Do we have the right quantity properly assigned? |
| Typical risk | Missed notice deadline and unwanted renewal | Over-licensing or under-licensing |
Software Contract Management governs the dates and commercial terms of contracts, whereas License Management governs the quantity and assignment of the licenses purchased under them.
How does Sovaro help with Software Contract Management?
Sovaro stores the contract with renewal date and notice period for each subscription and displays paid, assigned, and used licenses for the app right next to it. Licenses unused for 30 days are flagged. That puts contract data and actual usage in one place. Sovaro does not replace a legal review of contract clauses.