Situation
Corvane signed a $480K annual commitment on log ingestion. Eight months in, they are consuming at 138% of the prorated commitment. Their finance team has asked the AE, Priya Raman, about the overage bill. Sales wants to keep Corvane happy. Finance wants the overage paid. Corvane wants a smaller number.
What I did
- Pulled 8 months of usage from the platform and modeled the run rate forward. Actual annualized consumption: ~$662K. Overage at list: $182K.
- Instead of negotiating the overage in isolation, I proposed a reset: a new 24-month commitment sized to actual usage plus 10% growth headroom.
- Built three options for Priya to present. Each one is better for Corvane than paying the overage, and each one is better for us than a discount on a static contract.
| Option | Term | Annual commit | Effective rate vs. current | Overage handling | Our upside |
|---|---|---|---|---|---|
| A | 12 mo | $660K | −8% | Waived on signature | Modest: locks current rate |
| B | 24 mo | $700K | −12% | Waived on signature | 2-year visibility, +46% ACV |
| C | 36 mo, ramped | $620K → $700K → $760K | −14% at exit | Credited 50% to year 1 | 3-year TCV $2.08M |
Give/get
The rate reduction is the give. The gets are a longer term, a commitment that matches real usage (no more overage disputes), and net-30 payment terms held rather than extended to net-60. The overage waiver costs $182K on paper, but that money was never going to be collected cleanly. A reset converts a collections problem into $1.4M of new TCV.
Cross-functional path
- Finance: revenue recognition on the ramp. Confirmed the year-1 credit books as a discount, not a liability.
- Legal: order form amendment language for superseding the original commitment.
- Product: confirmed ingestion tiering would not change mid-term.
- Priya: one 20-minute call to walk through the options and the “why” for each, so she could present with confidence.
Result
Corvane picked B. ACV up 46%, overage dispute closed, and next year’s renewal conversation starts from a healthy baseline.