How to save money and reduce costs with a yearly auto-renew services checkup
techrepublic cheat sheet
Update: This article was originally published in March 2015. It has been updated in April 2019 with current price and service information.
These days, all departments are being asked to do more and more with less and less. That's just a fact of life. What's sad, however, is that many of us are spending on things we're not using, so we have even less of less than we should.
Also: What is cloud computing? Everything you need to know
That brings me to today's pro tip: doing an auto-renew audit. You know what I'm talking about, right? Auto-renew is that easy way to sign up for services where you keep getting service month after month, but you don't have to go through the hassle of getting your accounts payable department to write checks or manage bills. Instead, you hand over your company credit card number and everything just happens automagically.
We do this at home, too. How many of us have online service, streaming video, and SaaS accounts that ding our credit cards every month? Raise your hands. Yep. Me, too.
In business, though, we're starting to see more of these auto-renew deals as we move to software-as-a-service and cloud-based services. We hand over a credit card number to Amazon or Saleforce, or Microsoft or Google and we get our services, month after month.
But what if you don't need those services anymore? What if you're using less of a service or transitioned to something else? Did you or your A/R folks remember to turn off that auto-renew?
Here are some reasons you might need to cancel auto-renew and a few things to look out for.
Reducing employee count: We've talked in the past about multi-factor authentication and identity management before, and in fact, I've done a bunch of webcasts about the topic. One of the key challenges is managing credentials when an employee leaves the company. By federating identity, when an employee leaves the company, a good identity management system will also remove all access for the employee of all the various SaaS services the employee may need to access.
But... most identity management services don't turn off billing. While many services bill based on the total number of users, some bill by individual users. Make sure you turn off the billing when you drop employees.
Increasing employee count: Have you recently gone through a growth spurt? Are you still paying the same rate for your cloud services as you were when you were a smaller company? Are you getting a volume discount? Have you asked for a volume discount given the larger number of seats you're filling?
Change in service pricing: I used to use a business Exchange hosting service that charged us (my wife and I) $15 per user. The company providing the service changed the names and offerings of their plans, so what we were paying $15 per month for was now available for $12.50. Even so, we were never notified and still kept paying the old amount.
Featured
Now, for a small two-person company, an extra $60 per year charge isn't that big, although I would have rather taken my wife out for dinner with that sixty bucks than unnecessarily pay it to a hosting service. But start multiplying that same $2.50 a month savings over 300 employees or 3,000 employees and it turns into real money. A company with 300 employees would spend an extra $9,000 a year, and a company with 3000 employees would spend an unnecessary $90,000 a year -- all because service pricing wasn't adjusted to match current programs.
Increase in service price: We've started to see services, particularly those with high switching costs, begin to raise rates. Earlier this month, I spotlighted how at least a quarter of the cloud services I looked into raised their rates in the past year.
Also: Storage, servers and more: We found 24 cloud services for your business
Change in services you need: Finally, what about when your needs change? Many cloud services come with a laundry list of features, the more to tempt you with. They offer a scale, ranging from smaller sets of services at lower prices to more complete sets of services at higher prices. But do you need all those services?
Salesforce's Sales Cloud, for example, jumps from $25 per user per month to $75, $150, and $300 per user per month, depending on the services used. Those are big jumps. Do you need all those services? If you're paying $150 per month for each user, do you need to, or would the $75 per month or the $25 per month plan do as well?
Look for a better deal: I subscribe to an online service I was planning to discontinue. For the price I had been paying, it just wasn't worth it. But when I went to cancel, the company offered me one of those deals that you just can't pass up. So I still have the service. But I'm now paying -- for a year -- what I had been previously paying for a month. It pays to investigate your options.
Doing the audit
Let's get back to the idea of an auto-renew audit. Now that you understand where to look, it might benefit you to sit down with your company's finance folks, share this article, and discuss ways to explore where you're spending your auto-renew dollars.
Put together a comprehensive list and look at it carefully. The bottom line amount may prove shocking. My wife did this for my small firm, and we spend, just for the two of us, a huge amount on auto-renewing services, some of which we just don't use.
Also: What's the best cloud storage for you?
Even with my very small business, we found enough completely unnecessary services in our billing to cover the car payment on my muscle car. Wouldn't you rather have a scary-fast car than pay a bunch of online services you no longer use?
Once you gather the details of how you use all these services, carefully consider which ones you need, which ones are nice to have, and which ones are just no longer relevant.
Look carefully. Some of those budget dollars you've been unable to get from management might be right in front of your nose, once you complete your auto-renew audit.
You can follow my day-to-day project updates on social media. Be sure to follow me on Twitter at @DavidGewirtz, on Facebook at Facebook.com/DavidGewirtz, on Instagram at Instagram.com/DavidGewirtz, and on YouTube at YouTube.com/DavidGewirtzTV.