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Conducting Business Via the Cloud: The Role of SaaS Agreements

By John DiGiacomo

Many, if not all, businesses need to utilize software in order to function. The software might take the form of an inventory ordering system, a payment processing system, or a smartphone app for the company. Software is everywhere and it is rapidly moving to cloud based platforms, but rarely is a company capable of developing its own cloud-based software applications in-house. Normally, a company must rely on someone else to develop or supply the software that the business uses in its day-to-day operations.

What is Software as a Service?

Software as a service (also known as SaaS), are software products that are available to users via the internet and many businesses use SaaS to help run their companies smoothly. Businesses get the software that they need by licensing it via SaaS agreements. ThisĀ is a contract between the software provider and the software user that lays out the terms of use of the software. What is unique about SaaS is that the software is accessed over the internet, i.e., the user never obtains a copy of the software. Rather, the SaaS agreement grants the user access to the software.

Through a SaaS agreement, the user gets access to software applications and data storage that is in the cloud for a limited amount of time. This means that the provider houses the servers, owns the software and stores and/or processes the data for the user per the terms of the agreement.

Why You Need a Lawyer to Help Review SaaS Agreements

SaaS agreements are often complicated, dense and difficult to read because they are packed full of technical terms, legal jargon, as well as software and computer lingo. These unique agreements need to be reviewed by a qualified lawyer to ensure that your are getting terms that are fair and reasonable.

It will be important for you as a business owner to understand your rights and obligations under the SaaS agreement, such as:

  • Key contract terms like the duration of the agreement, i.e., how long the SaaS agreement is valid for – usually one-year intervals.
  • Ownership rights, i.e., who owns the software, any hardware, customer data, etc.
  • Data security and privacy terms and conditions.
  • Whether there are guarantees of availability of service, support, and security.
  • How downtime will be handled for service or maintenance issues.
  • Right of renewal, i.e., is the SaaS agreement auto-renewed?
  • Termination rights, i.e., under what conditions can the business get out of the agreement.
  • What the post termination obligations are, i.e., must the supplier return all data to the business?

Contact an Experienced New York Business Lawyer

SaaS agreements are an important part of doing business when a company uses the cloud. Having an experienced and qualified business lawyer review your SaaS agreement can ensure that your rights are protected. The professionals at Revision Legal have helped countless businesses develop and enter into SaaS agreements and we can help you too. Contact us using the form on this page or call us at 855-473-8474.

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