How Fortune 500s Negotiate Software License True-Ups

Episode notes

Lucas and Luna dive into the most quietly contentious clause in enterprise software contracts: the true-up. They walk through what happens when a Fortune 500 customer's user count exceeds their license—using a real example from a global retailer that got hit with a $4.7 million retroactive bill after an audit. Lucas explains why vendors like Oracle and SAP build true-up triggers into their contracts, and why procurement teams are now negotiating 'self-audit windows' and capped liability. Luna brings in data from a Gartner survey showing that 62% of large enterprises have paid a true-up penalty in the last three years. They discuss how the pendulum is shifting: buyers are winning clauses that cap true-up costs at 10% of annual contract value, and some are even negotiating true-up waivers for the first 12 months. The episode closes with a forward look at how AI usage tracking could make true-ups even more aggressive—and why procurement needs to address it now.