A new Telarus study finds IT leaders are increasingly willing to change suppliers at contract renewal as costs climb and technology shifts rapidly. The survey of 503 midmarket and enterprise purchasers, commissioned from Redpoint Insights for Telarus’ 2026-27 Tech Trends Report, found 84% of respondents are open to switching vendors at renewal.
Renewal costs rose for most buyers: 87% said they saw higher renewal prices over the past year, and one-third of respondents said they regretted a major technology purchase. “They’ve had hard experiences in renewal, and they know that technology is moving at the speed of light,” Telarus Chief Marketing and Experience Officer Jen Dimas said at the Telarus Partner Summit last month.
Vendor renewals push buyers toward alternatives
Vendors are prioritizing new-customer acquisition and raising the cost of renewals, a dynamic that is especially pronounced in SaaS where providers face pressure from investors to sustain profit margins above 40%. “Basically, your existing customers are just gluttons for punishment,” said Ray Wang, Founder and Principal Analyst at Constellation Research, who helped build the report. “The new customers are getting the discounts, and [the vendors] have got to continue to show numbers and show that growth.”
Wang pointed to Nutanix’s aggressive campaign to win customers of VMware by Broadcom as an extreme example. As Broadcom is pushing existing clients into expensive long-term contracts, rival vendors are racing to win those accounts. “It’s just go-land-win these accounts, because if you don’t, it’s going to be a seven-year dry spell for you,” Wang said.
In unified communications and customer experience software, suppliers are explicitly factoring seat churn into renewal strategies. Linzee Safron, Director of Advisory at Eclipse, said vendors pressure their sellers to keep accounts flat or growing, and when customers try to drop license counts at renewal, providers often add extra SKUs—frequently AI capabilities—to the proposal to preserve total spend. Safron said she has observed that upsell tactic on four separate occasions in the last 12 months.
Safron described a typical exchange: “The customer says, ‘Hi, I’m ready to renew. I’d like to see what a 12-, 24-, and 36-month renewal offer looks like for us, but we need to drop our quantities 10%.’ The providers are coming back and saying, ‘Well, you dropped your quantity, so either your standard rates are going to go up because you don’t have the volume discount anymore. Or here’s an alternative proposal that has 10% less quantity here, but now also going to get virtual agent capability or an AI agent.'”
The telecom service provider market shows similar pressure. Safron said fiber prices are rising in a pattern comparable to 2014–2017, driven by intensive network buildouts, and vendors are no longer conceding on renewals. “You could typically get your account managers to reduce the costs or present competitive pricing for another carrier to reduce the cost and be able to save and grow that business in other ways,” she said, noting that approach is less available today.
The Telarus report and interviews with industry analysts and advisers indicate a market where renewal pricing dynamics, investor-driven margin expectations, and accelerating technology change are prompting buyers to hunt for discounts and consider switching vendors at contract time.
