A breakdown of key clauses commonly found in SaaS contracts

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The software as a service (SaaS) industry is booming with more and more companies adopting the subscription business model; however, cloud service agreements haven’t gotten any easier to comprehend. Before signing on the dotted line, businesses must be equipped to evaluate some of the key clauses found in almost every SaaS contract. By learning the basics of SaaS contracts, your team will be positioned for a successful negotiation that could save your company time and money.  

Most teams are familiar with perpetual licensing agreements—the business pays for the software upfront and gains the right to use the software indefinitely. Often the provider will install the application(s) and relevant hardware on-premises for the buyer. However, SaaS contracts license the right to use the software rather than own the software. In the new model, customers pay a recurring fee to access applications hosted in the cloud by the provider. While this is the premier distinction between SaaS contracts and traditional licensing agreements, it’s just the tip of the iceberg.   

Read our full blog for an in-depth look at some of the key clauses in SaaS contracts. 

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