Pricing Overview

Splunk's pricing model is consumption-based, primarily charging based on the volume of data ingested per day. This allows costs to align with actual usage and provides flexibility for businesses of all sizes. If users exceed their allotted usage, they may incur overage charges, which can significantly increase costs. Splunk also offers workload-based pricing, where fees are based on computational resources used, giving another option to manage expenses more closely tied to actual activity.The core pricing model is based on the folowing:

1. Data Volume (GB/day ingested)
2. License Type (Enterprise, Term, Cloud, Infrastructure)
3. Deployment (Self-hosted, Cloud, Hybrid)
4. Add-ons (Premium apps, Security features)
5. Support Level (Standard, Enterprise, Premium)

General Strategy

Timing and Seasonal Opportunities - End of Fiscal Year Leverage: Negotiate during Splunk's fiscal year-end in January to capitalize on their increased willingness to offer discounts.Ramp Plans: Consider negotiating ramp plans that align with your company's growth or seasonal usage patterns to secure better terms.

Strategic Purchase Options - Partner Purchasing: Use partners like Spico Solutions to purchase Splunk services, which can help waive standard 5% renewal increases.Conservative Initial Purchase: Start with a conservative commitment to avoid overages, as Splunk typically does not charge extra unless monthly commitments are consistently exceeded.Renewal and Cost Management - Push on Yearly Increases: Actively push back against standard year-over-year (YoY) increase rates during renewals to potentially lower these uplift percentages. -Evaluate Usage Carefully: Regularly assess your usage to avoid significant true-ups. Be cautious about reducing your volume as Splunk may threaten to remove discounts and revert to list pricing.Leverage Internal Changes: Utilize internal company changes, such as reductions in force (RIF), as leverage in negotiations to reduce costs.

Discount Opportunities - Case Study Discounts: Inquire about additional discounts such as those offered for participating in case studies, which may not be automatically included in renewal terms.

Custom Strategies

Strategy #1: When downgrading usage

• Step One: Assess Current Usage: Start by thoroughly evaluating your current usage of Splunk's services to pinpoint areas where downgrading is necessary.
• Step 2: Identify Downgrade Options: Determine which features, services, or resources can be reduced without compromising essential functionalities. Focus on retaining critical capabilities while reducing costs.
• Step 3: Communicate Intent to Downgrade: Reach out to Splunk's representatives to discuss your intention to downgrade usage. Clearly explain your reasons and provide supporting data or insights.
• Step 4: Negotiate Rate Continuity: During negotiations, emphasize the importance of maintaining existing rates despite the downgrade in usage. Highlight your long-term partnership and loyalty to Splunk as reasons to retain favorable pricing.
• Step 5: Explore Alternatives: Propose alternative solutions or adjustments that allow you to reduce usage while keeping rates unchanged. This could involve restructuring the agreement or reallocating resources to better align with your needs.
• Step 6: Tie Signature Date for Better Rate: Propose tying the agreement's signature date to secure rate continuity or even a better rate. Express willingness to finalize the agreement promptly in exchange for favorable terms.

Strategy #2: For renewals and waiving uplifts

• Step One: Reach out to Splunk to gather information on your usage and needs. This data can also support future planning, such as RFPs.
• Step Two: Conduct an internal assessment to identify service and resource requirements. Discuss potential adjustments, emphasizing the need for flexibility and cost-effectiveness.
• Step Three: Communicate internal concerns about pricing changes and request quotes for short-term options. Delay broader negotiations to gather additional information from other vendors.
• Step Four: Engage with Splunk to explore various renewal options, including different contract lengths. This provides insight into available flexibility.
• Step Five: Express dissatisfaction with pricing and present competitive quotes obtained during the evaluation period. Involve higher management to seek longer-term pricing options for further negotiation.

Strategy #3: For Net New Purchases

• Step 1: Start with Free Trials: Begin by using Splunk's free trials to understand its suitability for your needs.
• Step 2: Evaluate Usage and Seasons: Analyze your usage data and negotiate during Splunk's fiscal year-end in January for better deals.
• Step 3: Strategic Purchasing: Explore partnering with Spico Solutions to potentially waive renewal increases.
• Step 4: Commit Conservatively: Avoid overages by starting with a conservative commitment and negotiating ramp plans for growth.
• Step 5: Negotiate Volume Discounts: Request discounts based on projected usage or commitment levels the further up you commit.
• Step 6: Manage Renewals and Costs: Push back on yearly increases and monitor usage to avoid unexpected charges.
• Step 7: Leverage Internal Changes: Use company changes like reductions in force as negotiation leverage.

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