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Glossary

Ramped pricing

Also called Ramp deal, Stepped pricing

Ramped pricing charges a different amount in each year of a multi-year contract, usually rising from a discounted first year.

Why it matters to a budget owner

Vendors offer ramps to win the deal: a low first year, then steps up. The headline discount is real, but later years cost more.

Record each year separately. A single annual figure understates the later years and makes next year's budget too low.

What to record

  • Each year's amount
  • Any discount and when it ends
  • The total across the term

Frequently asked questions

Is a ramp deal a good deal?

It can be, if you expect your usage to grow into it. Compare the total across the term, not the first-year price.

General working knowledge about commercial contracts, not legal advice. Your own agreement governs.

Glossary

  • Annual contract value (ACV)Annual contract value is a contract's average yearly value: the total contract value divided by the number of years.
  • Total contract value (TCV)Total contract value is everything a contract commits you to pay over its full term, including one-off and recurring fees.