If you were at a duck pond and a duck barked at you, you would be very surprized wouldn’t you? Totally confused probably.
The ‘duck’ you’re seeing looks like a duck, swims like a duck … but barks!?!
When your customer gets your SaaS agreement they might feel like this too. Or worse, perhaps, they don’t notice anything is wrong.
The Converted License Agreement – the reason it’s used for SaaS agreements
For those of you not born in the cloud but who now offer software as a service, there’s been a significant change in what you supply. You have had to re-architect or rebuild products. You’ve had to organize hosting or set up data centres. Change your business model and change your pricing. Change the way you market and sell ... and so on.
And when it came to the legal agreement, well, wouldn’t your license agreement be fine? Why bother with getting a new agreement written. Perhaps you could just re-label it ‘SaaS Agreement’ or ‘Cloud Service Agreement’ (something with the word ‘cloud’ in it), change a few things here and there and it would pass. My experience to date tells me that is what a lot of software vendors did.
From small vendors to large, the SaaS legal agreements can be low priority for a variety of reasons. Not enough time, not enough budget, not enough understanding of what would need to go into the new agreement…
So, for whatever reason, we see a lot of vendors’ SaaS agreements that look as though they have been converted from old license agreements. They’re made to look like SaaS agreements but they’re really not. If they were a duck they would bark.
Why it’s not a problem – until it’s a problem!
You might be pleased when the customer accepts or signs your SaaS agreement. That acceptance by the customer justifies your decision not to put time and money into a new agreement.
But maybe it would be better if your customer had challenged it before signing.
The agreement might talk about providing service – but also about a license to use the software. (It’s surprising how many SaaS agreements do this).
If they had challenged for example the availability commitment, that might have drawn your attention to the exception factors (where the availability commitment does not apply). Perhaps none were included. Perhaps what was included was not enough, or not described well.
And if only they had. Because when availability is not what is expected by the Customer and they dispute payment, you turn to the exception factors only to find that you’re really not covered. The Customer has a point and stops paying the monthly fee until the dispute is resolved. (It may have been better if specific service credits were included after all?)
Do you want to know the common problems with agreements?
(and how they cost vendors time and money, often in unrecognized ways)
… here’s what I’m offering: