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Why renewal rate is not the same like previous?

The world is constantly changing at a rapid pace, and this is particularly true for technology products. With each new version, these products offer more functionality, modern applications, and bug fixes. As a result, no technology product can afford to remain static and without change, as it would quickly become obsolete and outdated. This is why enterprise customers today demand regular updates and upgrades to their software, as well as ongoing perfection of technology offerings.

However, the cost of these updates and upgrades can be affected by various variable parameters, including changes in the product price, exchange rates, inflation, and other economic factors. For instance, the value of a currency may fluctuate due to international economic climate change, political instability, fiscal policy changes, or the implementation of various value-added taxes. Inflation, on the other hand, refers to a sustained increase in the general price level of goods and services in an economy over time. These factors can all have a significant impact on the cost of technology products, making it difficult to maintain a constant renewal rate.

The only exception to this is when customers are able to anticipate future price rises and need to continue using a product for an extended period of time. In such cases, E-SPIN can arrange for multiple-year contracts, allowing customers to pay upfront for the entire period and thereby benefit from cost savings in the long run. For example, if a customer has been using a particular product from E-SPIN for several years and sees its value increasing, they can opt for a five-year contract, paying in advance for the entire period. This approach ensures that the customer is not affected by any changes in product prices for the next five years and can enjoy significant procurement savings.

The post originally published 2017-Jun-19, rewrite and update on 2023-Feb-15.