In recent years, Salesforce – one of the largest enterprise SaaS vendors – has started to conduct an increasing amount of license verification reviews for their products. Many organizations are still not familiar with cloud or SaaS-based licensing. Most believe that if you sign up for a certain number of subscription-based licenses, you are free to use the software without any risk of audit or vendor non-compliance.

If your company has recently signed a Salesforce agreement or is thinking of purchasing Salesforce products for the first time, you might be surprised to learn that:

  1. Salesforce’s product portfolio is quite extensive. They offer many editions for each product at various prices.
  2. Salesforce is legally entitled to perform license verifications to check if usage inside your organization matches the contractual quantities.
  3. Salesforce licensing, as well as cloud licensing in general, comes with certain risks that may result in higher unexpected costs.

In this article, we will compare the different product functionalities and pricing for each of the most common product editions offered by Salesforce. We will also help identify ways to optimize your Salesforce usage by assessing your environment and efficiently re-assigning licenses where appropriate to save costs.

 

Understand Salesforce Products and License Agreements

Salesforce is a Customer Relationship Management (CRM) solution that offers a single platform, capable of integrating multiple business areas like marketing, sales, commerce, service, finance, and many more. Basically, each product comes in different bundles called editions that vary in functionality and pricing. Currently, there are 4 editions available to choose from, each geared toward specific business needs: Essentials, Professional, Enterprise or Unlimited.

For example, small companies with less than 10 users may be looking for the cheapest option for Service or Sales Cloud, and the Essentials edition—which includes basic functionalities and is priced at 25USD/user/month—may fit their business needs. On the other hand, large organizations can opt for any of the more expensive editions, the Unlimited edition being the complete solution with unlimited CRM support. Pricing per user ranges from 75 to 300 USD/month, depending on the volume of subscription licenses needed and license types selected.

According to Salesforce, the most popular edition is the Enterprise edition, which allows customers to customize their product and integrate it with other systems. Additionally, there is a Developer edition intended for development use only, allowing users to integrate Salesforce with other applications and develop new tools and applications. The Developer Edition also provides access to many of the features available in Enterprise Edition; however, production use is restricted.

In terms of license types, the options are even more extensive, and it’s not an easy task to choose the right licenses for your company. At the most basic level, Salesforce offers 6 license types:

  • Standard User Licenses
  • Chatter User Licenses
  • Communities User Licenses
  • Service Cloud Portal User Licenses
  • Sites and Site.com User Licenses
  • Authenticated Website User Licenses

However, the list above is not extensive, and there are many other licenses available for purchase. Some of them are limited to company use, while others, like the Customer Portal User licenses, extend to customers and partners.

Before purchasing Salesforce products, or if you want to add more users to your existing license pool, we recommend analyzing and understanding the different license types so you can choose the most suitable type for the intended end-users. Basically, a user license includes a baseline of features that a specific user may access (every user is allowed to use only one license type). Moreover, edition requirements vary for each user license type. For example, a Communities User License will only be available with Enterprise, Performance, Unlimited, or Developer editions, while the Lightning Platform App user will be available with Enterprise and Unlimited editions only. Therefore, you’ll need to understand the differences and limitations of each product and edition before entering into an agreement with Salesforce as it can overwhelm IT, business, and procurement teams.

Since all Salesforce products are in the cloud, many assume that Salesforce will never audit its customers for software subscription usage. While Salesforce may not have a well-known customer compliance program, they are legally entitled to perform a license verification of your company’s usage of their products. We have identified the audit clause from the “Master Subscription Agreement” to which every customer is engaged, and the specific terms could vary depending on what has been negotiated in your specific contract:

Usage Limits. Services and Content are subject to usage limits specified in Order Forms and Documentation. If Customer exceeds a contractual usage limit, SFDC may work with Customer to seek to reduce Customer’s usage so that it conforms to that limit. If, notwithstanding SFDC’s efforts, Customer is unable or unwilling to abide by a contractual usage limit, Customer will execute an Order Form for additional quantities of the applicable Services or Content promptly upon SFDC’s request, and/or pay any invoice for excess usage in accordance with the “Invoicing and Payment” section below. (Source: Salesforce.com)

While Salesforce avoids the use of words such as “audit” or “license verification”, they are still entitled to check if any licenses are being used in excess of what’s been purchased by a customer. Like a typical software audit or license verification review, Salesforce will charge for any unlicensed products through an “order form(s) for additional quantities” that get added to your current subscription agreement. Thus, customers will need to proactively manage their user/subscription usage to ensure that they stay in compliance with their Salesforce agreements. Failure to do so will result in unplanned IT OPEX fees, so it’s important to have a SaaS management strategy as part of your overall Software Asset Management (SAM) program.

 

Top 3 Ways to Make the Best out of Your Salesforce Licenses

Because there are many functionalities for Salesforce products, it can be quite challenging to decide on the best option needed for your employees. This is the reason why we recommend our customers to perform the following activities on their environment before signing a new Salesforce agreement or renewing an existing one.

  1. Evaluate Your Company Structure through Organizational Charts

We strongly recommend evaluating your entire organization by reviewing available organizational charts that include roles and titles for all users in the company and compare them with the functionalities of each license type offered by Salesforce. You may also need to verify responsibilities with key leaders or managers in each respective function. Although it can be a labor-intensive task, this will not only help you assign the most suitable license type for each user, but will also help you compare costs and functionalities for each of them and decide what’s needed and what’s not. Not all users will require access to the full CRM functionality, and some of them may be able to perform his/her daily duties with read-only access. As mentioned above, the prices can vary from $25 per user to upwards of $300 per user which can quickly add up depending on the size of your company.

  1. Ensure Credentials are Not Being Shared by Multiple Users 

One of the common risks of a user-based licensing model is the fact that multiple users can share credentials of a single license. This practice not only violates the terms of your license agreement with Salesforce, but it also poses a security risk and can expose your organization to cyber threats and attacks. The terms of usage that do not allow shared credentials are stated in the “Salesforce Master Subscription Agreement” referenced below:

Usage Restrictions. Customer will not (…) (f) attempt to gain unauthorized access to any Service or Content or its related systems or networks, (g) permit direct or indirect access to or use of any Services or Content in a way that circumvents a contractual usage limit, or use any Services to access or use any of SFDC intellectual property except as permitted under this Agreement, an Order Form, or the Documentation (…). (Source: Salesforce.com)

Bear in mind that there is one situation where Salesforce allows users to share credentials: if any user is experiencing any issues, administrators can log in to Salesforce as the user experiencing the problem, for troubleshooting purposes.

In order to avoid violating the user restrictions, we recommend leveraging an organizational chart (see above) to map out the number of users that are licensed for Salesforce and the specific requirement by functional area and employee role. By running a SaaS management tool (e.g., Zylo, Flexera, etc.) across your environment, you can determine the number of users accessing Salesforce and which modules they’re accessing, reconciling this usage data to your subscription entitlements within your Salesforce contract(s). If you discover that more users are accessing Salesforce than your company is licensed to, you should conduct a mock audit to identify whether there are users that can be optimized/re-assigned prior to purchasing additional subscription licenses. 

  1. Reduce Costs by Re-Assigning Users

We recommend companies to have a dedicated Salesforce resource to evaluate each license assignment and maximize the use of purchased licenses when additional user licenses need to be provisioned. We also recommend performing an internal assessment or mock audit of your Salesforce licenses and their assigned usage, and check whether users are still active, or they if they still require their Salesforce license to perform their daily activities. If licenses are not needed anymore, you can easily re-assign licenses from one user to another, based on actual consumption needs. This type of mock audit should be performed regularly to manage compliance risk or potential shelf-ware across your Salesforce environment.

Additionally, you should manage users and their roles regularly. For example, if certain employees only need to perform an update of their profiles for HR purposes and do not login into the Salesforce platform frequently, you may want to reconsider the type of license they currently use. Note the annual cost of a single Salesforce Sales + Service Cloud Enterprise user license is $2100, while the annual license cost of a Lightning Platform Plus is $1200. By identifying those users who do not need a full Salesforce license and assigning them a license with less functionalities can lead to significant cost savings for your company.

 

Connor is Here to Help

Although Salesforce licensing may seem overwhelming and can be a nightmare to manage, it is worth the effort to assess your current licenses and actual usage, as you could be at risk for over-deployment or your company may be spending way more than it should with the vendor. When it comes to SaaS management and SAM, partnering with an industry expert like Connor can help you quickly evaluate your current business needs, and determine the best license options for your employees and enterprise. To learn more, contact infor@connor-consulting.com today.