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Salesforce continues to increase the number of license verification reviews it performs for customers each year. Because SaaS or cloud-based licensing differs from traditional on-premise software license agreements, many businesses do not realize these contracts have different stipulations or usage terms. For instance, many 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. However, this is not always the case with SaaS or cloud-based software licenses.
This article 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.
There are three key things to know before you sign a Salesforce software agreement that will ensure that using the software is efficient for your business.
1. Salesforce’s product portfolio is quite extensive. In addition, they offer many editions for each product at various price points to meet the needs of different industries and enterprise sizes.
2. Salesforce is legally entitled to perform license verifications to check if usage inside your organization matches quantities stipulated in the license agreement and institute fees for any discrepancies.
3. In general, Salesforce subscriptions or SaaS-based licensing comes with certain risks that may result in significant unexpected costs if you fail to manage your software deployments.
Salesforce is a Customer Relationship Management (CRM) solution that integrates multiple business areas (such as marketing, sales, commerce, service, finance, and many more) across a single platform. Each product is offered in a bundle, called an edition, that varies in functionality and pricing. Currently, there are four pre-packaged editions available to choose from, each geared toward specific business needs: Essentials, Professional, Enterprise, or Unlimited.
To avoid purchasing a product that will not suit your business’ needs or paying for more licenses than necessary, it is important to review each edition and choose the best fit for your size now and not the size you plan to be in the future. There is no one size fits all, so it’s essential to understand the needs of each product and size it according to your current demand.
A small company with less than ten users would be best served to choose the Essentials edition. This edition includes the basic functionalities necessary for the business and just enough licenses for the current team. You can expect to pay around $25/user/month for the subscription; however, pricing varies by region and is subject to change.
On the other hand, large organizations can opt for one of the more expensive editions, with Unlimited edition being the most complete solution, including enterprise level CRM support. Pricing per user ranges from $75 to $300/month, depending on the volume of subscription licenses needed and license types selected.
While the above mentioned editions are standard offerings, Salesforce offers the Enterprise and Developer editions if you want to customize the products included in your platform.
According to Salesforce, the most popular edition is the Enterprise edition, which allows customers to customize their product selections and integrate them with other company systems. The Developer edition is intended for development use only, allowing users to integrate Salesforce with other enterprise applications and develop new tools and applications. The Developer Edition also provides access to many of the features available in the Enterprise edition, but restricts reproduction.
Salesforce offers a variety of license types. As a result, selecting the proper one for your business can be a complicated or non-trivial task. At the most basic level, Salesforce offers six 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
While this list is not extensive, and many other licenses are available for purchase, these are the primary six offered by Salesforce. Other options are limited to company use, and some, like the Customer Portal User licenses, extend to customers and partners.
Before purchasing new 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.
A user license includes a baseline of features that a specific user may access (every user is allowed to use only one license type). Edition requirements vary for each user license type. For example, a Communities User License is offered with Enterprise, Performance, Unlimited, or Developer editions, while the Lightning Platform App user is offered 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/or 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.
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 or next renewal. 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.
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 in their environment before signing a new Salesforce agreement or renewing an existing one.
We strongly recommend evaluating your entire organizational structure by reviewing available organizational charts that include roles and titles for all users in the company and comparing 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 help you assign the most appropriate license type for each user and help you compare costs and functionalities of each edition, deciding what is needed and what is not. Not all users will require access to the full CRM functionality, and some may be able to perform their 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 and expected growth.
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 violates the terms of your license agreement with Salesforce and poses a security risk, and also, exposes 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:
The 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 (…).
Bear in mind that there is one situation where Salesforce allows users to share credentials: if any user is experiencing application or technical issues, administrators can log into Salesforce as the user simultaneously to troubleshoot technical issues.
To avoid violating the user restrictions, we recommend leveraging an organizational chart (see above) to map out the number of licensed users 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).
Suppose you discover that more users are accessing Salesforce than your company is licensed for or extra features have been enabled. As a leading practice, your SAM team should conduct a mock audit to identify whether there are users that can be disabled/re-assigned, prior to purchasing additional subscription licenses.
We recommend that you establish a Salesforce resource who is responsible for evaluating each license assignment and optimizing the use of purchased (but allocated) 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 checking whether existing users are still active or 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 requirements. This type of mock audit should be performed regularly to manage compliance risk or potential shelf-ware (i.e., IT OPEX waste) across your Salesforce environment.
Additionally, you should manage users and their roles regularly. For example, certain employees may only need to perform an update of their profiles for HR purposes and do not login into the Salesforce platform frequently. In these cases, you may want to reconsider the type of license they currently use or have been assigned. Note that the annual cost of a single Salesforce Sales + Service Cloud Enterprise user license is $2,100, while the annual license cost of a Lightning Platform Plus is $1,200. Identifying users who do not need a full Salesforce license and assigning them a license with fewer functionalities can lead to significant cost savings for your company.
Although Salesforce licensing may seem overwhelming and challenging to manage, it is worth the effort to assess your current licenses and actual usage across the platform. You can manage and mitigate non-compliance risk and maximize your vendor TCO by doing so.
When it comes to SaaS management and SAM, partnering with an industry expert like Connor Consulting can help you quickly evaluate your current business needs and determine the best license options for your employees and enterprise. To learn more, contact softwareadvisoryservices@connor-consulting.com today.
