Software as a Service

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  1. DIFFERENCES BETWEEN SAAS AND LICENSING - SUMMARY
    • Difference in Technology
      • Who is responsible for hardware, base operating system
      • Who has access to data
      • Maintenance/uptime risk shifts
    • Difference in Legal Relationship
      • Who has access to supplier software code
      • One-time vs. ongoing relationship
      • Difference under Bankruptcy
    • SAAS (Software as a Service) is more Service than Software
      • No code provided
        • "Subscription" concept more common
      • Data hosted by supplier (may be hosted by supplier of supplier)
      • Underlying computer/network infrastructure controlled by supplier
      • Updates/upgrades controlled by supplier
  2. Ongoing Service Relationship
    • You can't fix object code, and in SAAS case you are not even given object code
    • SAAS implementations involve complex environments not easily replicable
    • Standards (modularity) can be efficient, because you can swap/fix standard items easier
  3. Review Sample License and ASP Agreement
  4. Usage Rights for SAAS
    • Similar to license rights, but couched in "access"
    • Can be audited by supplier more easily
    • Mechanics of access controls (control over passwords, etc.) can also simplify this
  5. Service Level Agreement
    • Provides alternative to warranty and maintenance
    • Often specific timeframes specified
    • Often specific credits or similar remedies
  6. Confidentiality/Data Protection
    • In SAAS - much more significant, as supplier controls user data
      • Specific industries may need more specific consideration, i.e. Gramm-Leach-Bliley, HIPAA; also consider Massachusetts-specific rules on data protection
      • Usage of aggregate data in SAAS also significant issue
  7. Indemnification/Cross indemnification
  8. Payments
    • Timing of reporting and payment; Prepayments
    • Audit of revenue/payments
  9. Termination
    • Contrast with Perpetual License
    • Access to data
  10. Service Provider Bankruptcy
    • In general, no obligation to continue
    • So, for example, no 365(n) rights in SAAS situations
    • Also, where is your data?
  11. Examples of Different Types of SAAS
  12. Reseller Arrangements regarding SAAS are more complex
  13. Summary Table: Different types of software relationships
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