SaaS Contract

Q: How are SaaS contracts different from end user license agreements?

• SaaS Contracts should describe how your SaaS service works, and set the right expectations for usage. 

  • Usually no software runs locally, the customer has no (or little) control over the software.  That really is the nature of a SaaS business.

  • Each SaaS business is unique.

• There is no license grant necessary in a SaaS contract.

  • SaaS contracts are usually term based (i.e. not perpetual).

  • You don’t need to grant a license in  most SaaS contracts, as the service is cloud based.

• SaaS data is hosted by the SaaS provider and not the end user (at least most of the time).

Takeaways:

1. Make sure you work with someone who really understands the unique nature of your SaaS business so that they can help you can get your SAAS contract right!

2. Oh yea, SaaS contracts don’t have to be complex or long, as they can be simplified and drafted in plain English.

3. Below are some blogs posts that may be helpful in learning more about SaaS Contracts.

• What Does Your SAAS Contract Say About Your Company!
• SaaS Contrancts vs. Software EULA. Which One Do I Need?
• Have SaaS Contracts Become Commoditized?

I have a lot more information on SaaS contracts, so take a look at the home page. There is a lot to learn about SaaS contracting, so get educated. While thing are changing very quickly, there are a lot of basic things to understand. For example, you should learn about copyright protection for software and GUIs, why you should register your copyrights, what are the latest trends in SaaS privacy, channel agreement hot issues, what Trust Sites (example, Salesforce Trust Site) are and why they matter, what to do if you customer sends you their form agreement. I have blos posts on all these topics, so get educated!