Vendor Selection: New OEM Acquisition

Two Vendors, One Competitive Opening. A Deal Structured on Buyer Terms.

Company type: Independent Software Vendor Service: New Acquisition Advisory Situation: Pre-signature

An independent software vendor was evaluating two OEM products to embed in their platform. Both vendors could do the job technically. The procurement team had run the feature comparison and felt ready to choose, but had not yet engaged commercially with either vendor.

They brought Thomas in before any pricing conversations started. That timing turned out to matter considerably.

  • Neither vendor had been told that a competitor was actively in the evaluation. The team treated the vendors as separate conversations rather than a competitive dynamic to be managed
  • One vendor's proposed pricing assumed a three-year minimum commit with an uncapped annual escalator, terms the team had provisionally accepted as standard
  • The other vendor had more favorable redistribution terms but hadn't been asked to compete on price
  • The team had no framework for using one vendor's willingness to flex against the other's preferred terms

The core issue wasn't that the team lacked negotiating ability. It was that they had never been in a room where these deals were built from the vendor side, and didn't know which levers existed or how much each vendor was likely to move.

We restructured the vendor engagement as a competitive negotiation rather than parallel independent conversations. Each vendor was made aware, professionally and without manufacturing urgency, that they were in a competitive evaluation with a defined commercial decision timeline.

We prioritized three commercial terms based on the client's actual business trajectory: upfront minimum commit, escalator structure, and redistribution rights. We used each vendor's relative flexibility on these terms as leverage against the other's preferred position.

Outcome
Lower Upfront minimum commit vs. vendor's initial position
Capped Annual escalator removed, uncapped exposure eliminated over term
Improved Long-term unit economics as deployment scales
"We had two vendors that could both do the job. Thomas used that to our advantage, played them against each other and got us a lower upfront commitment and better long-term economics. That's the kind of thing you don't think to do on your own."
CEO, Independent Software Vendor
Renewal: Existing OEM Agreement

The Renewal Number Felt Off. It Was. Here Is Exactly Why.

Company type: B2B Software Company Service: Renewal Negotiation Situation: Approaching renewal window

A CFO at a B2B software company was looking at their upcoming OEM renewal. The number the vendor had sent over didn't feel right. Pricing had stepped up meaningfully since the original deal, but the internal team couldn't pinpoint why or how to push back. They had no prior experience negotiating the agreement and had signed the original deal largely as presented.

The renewal window was approaching. They needed a strategy quickly.

  • The existing agreement contained a price escalator clause that had been compounding annually. The increase wasn't arbitrary, it was contractually baked in, but at a rate the team had never fully understood at signing
  • The minimum commit floor had been set based on early-stage usage and no longer matched their actual deployment profile. They were paying for headroom they weren't using
  • The renewal terms the vendor proposed extended the same structure for another three-year term, locking in the inflated baseline going forward
  • The client had more leverage than they realized. Their actual usage data created a legitimate basis for restructuring the pricing model rather than simply renewing as-is

We audited the current agreement against the client's actual usage pattern and built a counter-position around three specific commercial points: resetting the minimum commit to actual deployment, restructuring per-user pricing to reflect their current scale, and negotiating growth room into the new term so future expansion wouldn't trigger a separate price escalation.

The vendor's initial position was treated as the opening of a negotiation rather than a done deal. The client's usage data was the leverage.

Outcome
Reset Minimum commit aligned to actual deployment
Better Per-user pricing vs. what the vendor proposed
Built in Growth room built in, no surprise escalation triggers
"I brought Thomas in because the renewal number felt off. It was. He came back with a restructured deal, better per-user pricing, room to grow, no surprises. Should have called him sooner."
CFO, B2B Software Company

Recognize Either of These Situations?

Most OEM procurement situations fall into one of a handful of patterns. The details differ. The commercial dynamics rarely do.

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