Cloud, mobility, and telecom contracts require strong contract negotiation strategies. Contract mismanagement costs businesses an average of 9% of their annual revenue. For larger companies, losses can reach 15%. That’s a considerable amount of money slipping through the cracks.

One way it happens is through automatic renewals. Organizations miss out on the chance to adjust terms to fit the needs of their business. A quick review before signing can change that, and having some successful contract negotiation tactics and strategies under your belt can set you up for success.

These contracts can be time-consuming and complex, but they’re worth the effort. Negotiating your contract wisely can help you save money and secure better terms instead of accepting them immediately. Right now, there’s so much money left on the table. 

Don’t let your money slip away. Here’s how to get the upper hand in your next contract negotiation process for cloud, mobility, and telecom services.

1. Don’t Be Afraid to Negotiate

Almost everything is negotiable in a contract except taxes and mandated tariffs. The goal is to get the best deal by clarifying your needs during negotiation. Before signing any agreement, review these tips contract experts recommend for securing favorable terms.

• You have more leverage than you think. Negotiate terms like pricing, service duration, and delivery schedules. They can typically all be adjusted. So, if something doesn’t suit your business, ask for changes. 
• Persistence can pay off. If the provider says no, don’t take it as final. Keep asking if your request is reasonable. 
• Negotiate the things that will cost you the most. It’s easier said than done, but identifying your biggest costs can help you reduce them!
• Redline the contract. Send redlined versions back and forth to negotiate terms better suited to your needs. It’s all part of the contract negotiation process.
• Begin negotiations well before the contract deadline. This will help avoid being rushed into unfavorable terms.
• Clearly define your needs and non-negotiable terms to stay focused during discussions. This starts with a clear understanding of any pain points and missed opportunities.
• Provide pricing specifics. Use market data to support requests for better pricing, referencing competitors’ offers.
• Consider your goals and objectives and ensure the contract supports them, such as flexible payment terms or future scalability.
• Ensure the contract meets legal and regulatory requirements, especially data security and privacy. The governing law should be clear so everyone knows which laws apply if any issues arise.
• Practice active listening. Try to work collaboratively and ensure everyone feels heard and valued in the conversation.

You can secure terms that work for your business in the short and long term. Remember: If a term isn’t working for you, speak up. Figure out a negotiation style that works for you. TL;DR: 

Stay confident, and remember that you control the contracting process now. Effective contract negotiation helps you set clear expectations, avoid hidden risks, and build stronger business relationships.

2. Secure a Shorter Contract Term

Regarding cloud, mobility, and telecom contracts, timing and flexibility are key when negotiating contracts. Here’s what to keep in mind during the contract negotiation process:

• Keep it short. Aim for a contract term of 24-36 months. This gives you stability but also room to upgrade without penalties. Technology changes fast, and shorter terms keep you adaptable.
• Negotiate before your contract expires. Don’t wait until the end to renegotiate. Prices often rise near expiration, which weakens your position. Start early to secure better terms and avoid surprises.
• Prioritize flexibility. Look for contracts that offer flexibility. Shorter terms allow you to adjust to new technologies and market changes. Long-term contracts can leave you stuck with outdated solutions. Being locked into a deal could mean missing better options.
• Upgrade and consolidate services. Review your services regularly to ensure you’re not paying for outdated or unnecessary systems. Upgrading to more cost-effective solutions can reduce costs and simplify your operations.

Shorter, flexible contracts give you more control and help you stay ahead of changing tech needs. Start the negotiation process early and monitor renewal agreement terms to avoid unnecessary costs.

3. Remove or Modify Automatic Renewal Clauses

Keep an eye out for evergreen clauses. They’re standard clauses in telecom, cloud, and mobility contracts. Evergreen clauses renew contracts automatically unless you cancel the contract within a set period. Providers use them to keep services running, but missing the contract renewal window can frustrate you.

Some states, like New York, have laws that limit automatic renewals in certain service agreements. Courts have ruled that some tech services fall under these rules but do not tell us whether pure software or SaaS licenses are affected.

No matter where you are, pay attention to renewal dates. Many contracts need 60-90 days’ notice to cancel. Some providers tweak pricing or terms when a contract renews. Always check for changes. Evergreen clauses can limit flexibility as your needs shift. Getting locked in can make it harder to adapt or secure better rates.

Here’s how to handle them:

Keep these tips contract experts recommend in mind. And stay proactive to avoid getting stuck with terms that don’t work. Keep your contracts flexible as your business grows.

4. Lock in Agreed Terms with Written Commitments

When reviewing cloud, mobility, and telecom contracts, focusing on the agreed terms is essential. This step will help you negotiate in good faith and avoid surprises later in business negotiations.

• Double-check service details to make sure the services match what was discussed. Check any promises from the sales team, like waived fees or managed services. If the contract includes SLAs or response times, confirm they’re accurate. For example, if 24/7 support was promised, it should be clearly stated. If anything seems off, sort it out now to avoid problems later.
• Verify the pricing. Ensure the pricing matches the agreement, including discounts or special rates. Watch for hidden or unexpected charges, like one-time or recurring fees.

Check for any clauses about price increases if it’s a long-term contract. Understand when and how costs might change so there are no surprises later. While this might seem time-consuming, it’s critical. Many businesses don’t closely monitor this part of cloud, mobility, and telecom contracts. Don’t fall into this trap.

EY found that 71% of organizations don’t have the right tools or technology to track contract negotiations and deviations from standard terms, and 78% don’t monitor contractual obligations. Gaps like these lead to missed commitments and surprise costs. Avoid these risks by carefully reviewing the fine lines of your contracts. Or, consider using negotiation as a service to simplify your contract deals.

5. Challenge Miscellaneous and Hidden Fees

Miscellaneous and ancillary fees can add up, and not all are obvious.  Beyond the upfront price, additional charges can pile up, affecting the total cost of ownership. That’s why it’s important to review all potential fees before committing.

• Ask for a breakdown of fees, including installation, training, or management fees. You don’t want any surprises later.
• Negotiate any surcharges. Providers may pass on extra fees. Don’t just accept them. Challenge unreasonable charges, and you may be able to reduce or eliminate them.

Below are some fees that could crop up in your contract. 

• Government Support Funding: Fees for programs like the Universal Service Fund (USF) or Lifeline.
• Customer-Related Fees: Infrastructure charges that customers don’t own.
• Network and Construction Fees: Costs for building networks or repairing damage.
• Other Fees: Rental fees for poles, fibre access, or shared towers.
• Ancillary Fees: Charges for directory listings, billing for other providers, or selling data.

According to PwC, many providers include extra fees for regulatory costs and network updates, which you can often negotiate or challenge. Reviewing and negotiating these fees will give you more control over your costs. 

6. Protect Against Unfair Price Increases

When dealing with price modifications in contracts, especially in sectors like cloud, mobility, and telecom, it’s essential to set clear terms. This ensures both parties understand when and how pricing changes may occur in complex contracts. Here’s how to handle it during the contract negotiation process:

• Specify pricing adjustments: If prices change due to base plan increases, currency adjustments, revised IoT data plans, or other reasons, ensure the conditions for those changes are clearly defined.
• Contract modifications: A contract modification can change the scope, price, or both. The change must be agreed upon in writing, verbally, or through regular business practices, such as legal involvement.
• Scope and price considerations: If new goods or services are added and priced at their standalone value, it may be treated as a new contract. If the price is adjusted, management must assess whether it’s a continuation or modification of the original contract.
• Adjustments for already delivered goods: If the price of goods or services changes (e.g., a refund), that’s considered a price adjustment and should be accounted for separately.
• Scope reduction: If the scope of the contract is reduced, the accounting treatment depends on whether the remaining services are distinct. If they are, treat it as a new contract; if not, apply a cumulative catch-up adjustment.

Set clear terms for price changes so both sides know what to expect. This helps prevent misunderstandings and keeps disputes to a minimum. TL;DR:

7. Add a Market Review Clause to Keep Pricing Competitive

A market review clause allows you to update pricing based on market conditions. If you find a better deal elsewhere, this clause lets you ask your provider to match it. If they won’t, you can switch providers without penalties.

Key benefits include:

• The flexibility to negotiate better rates.
• Opt out without facing early termination fees if your provider doesn’t match the offer.

This clause ensures you’re not locked into old rates. The cloud, mobility, and telecom services market moves fast, and this clause keeps your options open by providing leverage to push for better terms while protecting you from overpaying.

8. Avoid Costly Minimum Annual Revenue Commitments (MARC)

Minimum annual revenue commitment requires customers to spend a fixed amount annually with a provider. It works in the vendor’s favor but ties the customer’s hands. MARC typically applies to service usage, subscriptions, or bandwidth. It forces businesses to meet spending thresholds, even when their needs drop.

Businesses are pushing back on MARC because it can lead to wasted spending and restrict flexibility. To reduce risks, companies negotiate on terms like:

If MARC is unavoidable, check for penalties, automatic renewals, and restrictions. Alternatives like pay-as-you-go pricing and volume-based discounts provide more freedom. The goal is to maintain service quality without unnecessary costs.

9. Strengthen the Force Majeure Clause

Force majeure, which means greater force in French, can act as a safety net when unexpected disruptions occur. It refers to events beyond anyone’s control and sets the rules for handling them. It ensures that both sides stay accountable.

These clauses cover risks like natural disasters, wars, strikes, and cyberattacks. When adding them to your contract, use clear, specific language. This will help stop providers from using force majeure as an excuse for avoidable issues.

Key elements to include:

• Providers must notify customers right away and explain their response.
• Routine outages or predictable failures shouldn’t count as force majeure.
• The clause should have time limits, with options to adjust the contract if the issue drags on.
• There should be practical solutions, like refunds, credits, or alternative services for extended downtime.

For example, a cyberattack should trigger an immediate response and customer notification. However, outages in high-risk areas shouldn’t count if they were foreseeable. A strong force majeure clause keeps things fair even when the unexpected happens.

10. Cap Liability

A limitation of liability clause protects both parties involved in cloud, mobility, and telecom contracts. Without it, one side could face unlimited financial risk. The clause should be fair, not favoring the provider or exposing the customer.

• Mutual liability: Both sides should have equal protection. One party shouldn’t carry more risk than the other.
• Excluded damages: Neither should be responsible for indirect losses, like lost profits or punitive damages.
• Liability cap: Many contracts set a limit, usually the total fees paid in the last 12 months. This keeps financial exposure in check.
• Balanced telecom agreements: These contracts should ensure the vendor and customer have equal liability limits.

A typical clause might read: “Except for liabilities due to gross negligence, willful misconduct, or breach of confidentiality agreement, neither the other party shall be liable for indirect, incidental, or consequential damages, including lost profits or business. In no event shall either party’s liability exceed the total fees paid in the last 12 months.”

This keeps things fair and prevents major financial risk. Remember this during your next contract negotiation.

11. Lock Down Confidentiality and Data Security

The more we rely on cloud, mobility, and telecom, the more critical it is for business teams to lock down data security in contract negotiations. Contracts should include strong confidentiality clauses and clear cybersecurity expectations. That way, businesses can reduce risks and stay compliant.

According to Statista, cybercrime costs are projected to soar from $9.22 trillion in 2024 to $13.82 trillion by 2028, so companies can’t afford to take security lightly.

Key security areas should be covered:

• Identify vulnerabilities and plan for breaches.
• Use strong authentication and limit access.
• Require encryption, secure storage, and clear retention policies.
• Conduct audits, penetration tests, and real-time threat detection.
• Define storage locations and follow regulations.

Service providers must be accountable. Contracts should require:

• Apply security based on sensitivity.
• Use multi-factor authentication and restrict access.
• Securely handle data access and deletion.
• Follow privacy laws and industry standards.

KPMG shares that emerging tech like AI and Quantum Computing come with their own set of risks. And as innovation moves forward, companies need to anticipate and address potential risks. Contracts should:

• Restrict AI/ML from processing company data to keep sensitive information from being used without permission.
• Prevent providers from monetizing insights to prevent third parties from profiting from business data.
• Require clear disclosures on data handling. This ensures companies know how their data is used.

These safeguards protect sensitive data and give businesses more control. They also help ensure compliance as technology keeps evolving.

12. Negotiate Stronger Indemnity Protections

In cloud, mobility, and telecom contracts, indemnity clauses help businesses manage risk. They shift liability, protecting companies from financial losses caused by service provider failures. These failures include data breaches, service disruptions, or intellectual property rights violations.

• Bare indemnity: Puts full responsibility on one party, with no limits.
• Limited indemnity: Sets a liability cap, covering only losses caused by the provider’s negligence.
• Third-party indemnity: Protects against lawsuits from a customer’s clients due to a service failure.
• Mutual indemnity: Makes both parties responsible for their own actions.
• Implied indemnity: This can apply, even if not written into the contract.

Third-party indemnity protects third parties against external claims, such as lawsuits from a customer’s clients due to a service failure. Mutual indemnity makes both parties responsible for their own actions. Implied indemnity can still apply, even in complex negotiating contracts between two parties or more parties, without a written clause.

When negotiating:

13. Make Payment and Service Deadlines Work for You

In cloud, mobility, and telecom contracts, missing a deadline can mean missed payments or service issues. Clear deadlines help keep costs down and prevent service disruptions. Vendors stick to strict schedules — cloud providers may need upfront payments, while telecom companies bill monthly. If the terms don’t work for you, negotiate for more flexibility.

Missed deadlines come with penalties. Late payments can mean extra fees or even service suspensions. Some cloud providers offer service level agreements (SLAs) with credits for downtime. But vague promises won’t help. Push for SLAs with real consequences for service failures.

When reviewing contracts:

14. Future-Proof Your Contracts

Nothing in business stays still, and contracts should keep up. Mergers, acquisitions, or downturns can turn rigid agreements into costly burdens. Many cloud, mobility, and telecom contracts lock companies into long commitments with penalties for early exit. Without the right clauses, businesses end up paying for services they don’t need.

To stay flexible, make sure your contract includes:

• M&A protection: This lets you reassign or renegotiate if your company merges or gets acquired.
• Scalability and downsizing: Adjusts services to match business needs.
• Termination for convenience: Gives an exit option, though vendors may push back.
• Force majeure and business disruptions: Covers unexpected downturns or regulatory changes.

Before signing, check if the contract allows for change. Review renewal dates and push for better terms if you’re locked in. A little planning now can save big headaches later.

15. Make Sure You Can Upgrade Tech Without Extra Costs

Upgrading technology in cloud, mobility, and telecom contracts should be simple, but rigid terms often make it challenging. Businesses need flexibility to move to better options without paying early termination fees (ETFs). Without it, they risk being stuck with outdated and expensive services.

• Ensure contracts allow for upgrades without penalties if you stay with the same provider.
• Avoid terms that lock you into outdated plans or make switching costly.
• Stay ready for advancements. Providers often roll out more efficient, affordable options.

Flexible negotiating contracts keep things smooth. They save money, boost efficiency, and make it easier to adapt to changing technology.

Take the Guesswork Out of IT Spend with Upland Cimpl

What makes contract negotiation important? For one, tech costs keep climbing, and 2025 will be no different. You’ve heard all about AI… Businesses invest in data centers and network upgrades to keep up with new technologies. These upgrades push costs higher for service providers – and for you. Overall, telecom, mobility, and cloud expenses are on the uptick, making cost management more critical than ever.

Despite these growing costs, many businesses still overpay due to poor contract management and vendor oversight. Upland Cimpl helps you take control. It offers the oversight to cut waste, lower expenses, and improve efficiency. Want to learn more? Download our ebook.

Want to see where you’re overspending? Catch Cimpl in action.