The first step to taking the reins of their stack is to understand SaaS licensing agreements. Next, implement some industry best practices to streamline your SaaS contract management and take it to the next level. What is the difference between a perpetual license and a SaaS license? Eternal means infinite. Your organization may have a perpetual license for certain software, such as Microsoft products. Microsoft has a perpetual licensing business model and offers the option to pay a flat rate for perpetual use of software such as Microsoft Office. While SaaS agreements vary by company and product offering, the following are essential to any SaaS agreement: In many cases, you`ll see a limited-use software license agreement (LULA) for cloud-hosted SaaS applications. A LULA typically includes all the terms of the license agreement as well as the service level agreement (SLA). I am an attorney in Denver, Colorado with 13 years of experience working with individuals and businesses of all sizes. My main areas of activity are general corporate/business law, real estate, commercial transactions and agreements as well as mergers and acquisitions. I strive to provide exceptional representation at a reasonable price. I`ll be honest, as a SaaS buyer, if I came to the Indemnification, Liability, and Arbitration sections of a new software contract, my eyes would be blurred and I would make a “for legal review” note. These articles are strictly legal and refer to the extent to which the licensor and licensee are liable when things go south.
So while I was trying to make sure I had a general understanding of these sections, I always made sure that our legal team was reviewed. A SaaS license agreement could be called a hybrid between a software license agreement and a “software as a service” or SaaS agreement. A SaaS software agreement is a service agreement and does not require a software license. The confusion lies in the use of the word “software”. By asking what the customer plans to do with the software, you can clear up the confusion. If the customer plans to install a copy of the software on their computer, download a version, etc., the customer needs a software license. Note that before diving into the terms themselves, the document contains some definitions designed to help the reader better understand the terms. Most SaaS agreements include a section like this. Asana, for example, defines concretely: you need to make sure that the language you include in relation to the user agreements is very clear. A judge may conclude that an agreement is not clear enough to stand if you use too much legal or technical jargon for a user to reasonably understand. Some people call this a license for the service, but it almost alludes to some sort of copyright license. As an owner, you don`t even want to imply that your customer has intellectual property rights in your protected software.
A SaaS agreement, on the other hand, gives customers access to software and other technologies through the cloud, but no physical goods are exchanged. A SaaS agreement allows end users to access the relevant products online. As a result, the structure of a SaaS agreement focuses on authorizing the use of a product rather than authorizing the use of the product as a service. The main difference between an EULA and a SaaS contract is that the main components of the software are located at the provider and not on-site at the end user`s premises and are accessible online, for example via a web browser, rather than being downloaded locally. Of course, it may not be as black and white as this one and sometimes you may need to use both a SaaS agreement and an EULA where end users can download a mobile app version of any software, for example. A useful feature on Mailchimp`s Terms of Service page is a sidebar that allows readers to navigate through the six main sections of the agreement. A SaaS agreement may contain extended service elements or only give end users access to products that can also be licensed in the traditional way. In the SaaS model, no additional software or hardware is required because the data is downloaded to a system and then stored in the cloud.
Another name for license use restrictions is the licensee`s obligation. This clause of a SaaS license specifies how the customer can use the software. For example, it may be said that Licensee may not use the Software for any reason outside of the defined business purposes. A SaaS contract is a legal contract between the developers of an application and its users. It defines the conditions that describe how the SaaS application is accessed and used. As it seems, the term and termination define the duration of the agreement and how you and the provider should treat the termination. For example, the duration of the contract may be something like “one year of automatic renewals” if you do not notify the provider of the termination within a certain period of time before renewal. You can also talk about the protection of the Licensee`s data. Licensor Services are a SaaS license clause that specifies what the SaaS provider (Licensor) provides to Customer (for example. B, data security) and what it does to protect Customer Data. That`s where your IT department and SaaS security checklist come in.
If you`ve ever conducted a questionnaire about vendor safety and risk, there shouldn`t be any surprises here. With a SaaS agreement, it is important to consider an SLA or service level agreement. These usually deal with the approved time to fix bugs or fix performance issues such as speed or latency. But these are not the only options. As companies continue to optimize their SaaS license management, SaaS providers offer many variations of the standard license types mentioned above. Examples of these variations include: In the event of bankruptcy, a seller may cease to fulfill its contractual obligations, including ongoing SaaS services. It is possible for a court to force a supplier to continue to provide contractual services, but only if it falls under an intellectual property license. Indeed, Section 365(n) of the Bankruptcy Act protects the customer`s right to continue to use “licensed intellectual property”. It does not protect contractually agreed services. SaaS agreements are an integral part of any software-as-a-service business. Be sure to work with lawyers who know how these contracts work when you create your contracts. SaaS agreements replace on-premises software licenses in the IT industry.
Indeed, keeping software applications in the cloud can provide the following: “What is the difference between an EULA (an end user license agreement) and a SaaS (Software-as-a-Service) agreement?” A license grants limited use rights. Software licenses cannot be exclusive or exclusive. You may also be limited: to be an experienced negotiator and an expert in drafting these types of contracts, you need to understand the legal issues that are often encountered in SaaS agreements and licenses. Two main points are as follows: The SaaS agreement also establishes three types of users: If you offer a SaaS (Software-as-a-Service) product, you need to develop a SaaS agreement or SaaS contract that allows users to know how to interact with your service and how not. These types of agreements are becoming more common, replacing traditional software licenses for computer applications. Migrating applications to the cloud offers operational and financial benefits. However, certain terms and conditions apply to all cloud service contracts. This includes: The problem is that in order to negotiate a good SaaS deal, the contract writer needs to understand the legal nuances between the two. Two important issues fall within the scope of the permitted use and the nature of the contract. Sometimes SaaS services are called licenses. However, this does not mean that the customer has a license under intellectual property rights.
I agree with you that licenses should not be granted in SaaS agreements, which are actually service contracts. However, there seems to be a trend in US SaaS agreements to grant a “license”, even in a service-only scenario. There is a very limited analysis on this point, apart from the fact that licensing can protect the service provider`s ability to make claims of intellectual property infringement even in the event of unauthorized access or use. Have you had more detailed discussions on this point with other people practicing in the area? I would appreciate any further analysis you may have. Thank you very much. Of course, your offering can include both SaaS and on-premise software. A SaaS provider can deploy its core offering online, but it can also provide an application for customers` computers – something that helps those machines communicate with the online service. .