# When to Push for Multi-Year Contracts in the AI Era?

Short-term contracts become the new B2B norm.

- **Source:** [SaaStr](https://www.saastr.com)
- **Published:** 2026-07-25
- **Topic:** [Sales & BD](https://brifing.si/c/sales)
- **Original article:** <https://www.saastr.com/dear-saastr-when-should-we-start-pushing-for-multi-year-contracts/>
- **On Brifing:** https://brifing.si/s/96ddc2c9-a1ac-4886-8e4e-f3382e251f7f

## Market Dynamics Shifted

ICONIQ data shows 3-year contracts dropped from 28% in 2023 to 23% in 2026. Sub-1-year deals jumped from 4% to 13%. Buyers demand flexibility against tech obsolescence.

## AI's Impact

AI solutions undergo radical updates every 18 months. A 3-year contract may lock customers into outdated tech by year two. Vendor leadership rarely lasts beyond 10-12 months.

## Success Cases

Companies like Datadog and Snowflake secure long contracts through customer expansion. Their secret: 110-123% Net Dollar Retention and rapid ROI delivery.

## Flawed Strategy

Forcing multi-year deals or discounting them breeds resentment. Customers question commitments by month 18, leading to renewal churn.

## Right Approach

Focus on NRR over initial contract length. Ensure customers see ROI within 60-90 days. Make renewals inevitable through post-sales support and fast deployment.

## Future Outlook

By 2026, long commitments will stem from organic customer expansion, not coercion. Outcome-driven relationships will differentiate winners.

## Sources covering this story

- https://www.saastr.com/dear-saastr-when-should-we-start-pushing-for-multi-year-contracts/ — 

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_Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._