Negotiating SaaS Deals: Key Client and Vendor Facing Terms

Software as a Service (SaaS) is an increasingly prevalent class of technology transaction. Via SaaS, companies of varied sizes and risk profiles outsource elements of their data stewardship to third party organizations, in order to benefit from these third parties’ software platforms.

As SaaS proliferates - through corporate cloud usage, for example, which Gartner predicts will result in $1 trillion in IT spending over the next five years - the agreements underpinning SaaS grow progressively vital to the enterprises that execute them.

Still, the SaaS market is only growing. Online statistics company Statista predicts the cloud SaaS market will hit $116.39 billion in 2018, a more than $10 billion increase from 2017. Software companies are forced to grow in kind, or fold: a 2014 McKinsey & Company article asserted that software companies growing 20% annually have a 92% chance of shuttering in a few years.

In this course, attorneys Erica Grace Martin and Larry Schultis discuss the most important elements to any SaaS agreement - from both sides of the table. Whether an attorney represents a vendor or customer of a SaaS solution, an in-depth understanding of the priorities of all parties involved is essential towards negotiating a mutually beneficial SaaS agreement.

Learning Objectives:

1. Define “SaaS”
2. Identify the difference between an End User License Agreement and a SaaS Agreement
3. Address the contractual terms in a SaaS Agreement, such as “license scope,” “hosting,” and “disaster recovery and “business continuity”
4. Discuss the issues of termination of a SaaS Agreement