Definition
Annual contract value is the recurring revenue a contract represents per year, used to compare deals of different lengths on a like-for-like basis.
ACV normalises a three-year deal against a one-year one, but it ignores everything outside the subscription line - implementation, change orders, and exit. Compare on total cost of ownership, not ACV, before you sign.
Go deeperSoftware total cost of ownership: the hidden costsRelated terms
Benchside turns annual contract value into the exact questions, exclusions, and lock-in math for your specific vendor - your first project is free.