Why EDUCATION is So Important to Software Negotiations or SAAS Negotiations

Think about it. One of the most important things to remember — maybe the most important thing — is that it is really important to educate your customer, partner, etc. about your Software or SAAS model when negotiating the software eula or SAAS contract (i.e. Software negotiations or SAAS negotiations).  This is important as with all IT based contracts the buyer needs to know what they are buying, as they are purchasing an 'intangible' item. As they can't touch or feel it, it is incumbent on the seller to educate the buyer about  what they are selling, what the customer can expect, how it is paid for, how additional usage will be measured and paid for, etc.) as part of the contract negotiations.

So how do you do this?

• Put together a 'simple' document explaining your pricing and its methodology (or maybe a FAQ page), and put it up on the web (don't forget to send this link to the person that is reviewing the Software EULA or SAAS contract).  This summary must me simple, and does not necessarily need to be very long or detailed (think bullet points, and short sentences).
• Be transparent and clear (this is not the time to hide anything).
• Educate not only the user of the technology, but also the person that is reviewing the contract (sometimes it is the same person, but not always).
• Make sure your Software EULA or SAAS contract describes your model. Your contract can help communicate, so don't forget that part.

If you don't do this, I think you will too often find that the buyer will then 'over estimate the risk issues' (as they don't understand the model) and put legal terms in front of you that you don't want to (or can't) sign. I have seen this so many times during the negotiation process, and it is something that can and should be avoided.

Remember that negotiations don't have to be adversarial, and if you look at it as an education process they will probably go a lot smoother (you educate them on your model (for starters) and they educate you on their concerns/issues in getting the contract signed). This is not hard to remember, so just think education when negotiating with that new customer or partner.

Resources:

ScriptLogic Licensing Resources

Adobe Licensing FAQ

Disclaimer: This is provided for educational and informational purposes only, and is not legal advice. Talk to your attorney for legal advice, as they should consider the pertinent facts and applicable law before providing any advice.

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2 Responses to “Why EDUCATION is So Important to Software Negotiations or SAAS Negotiations”

1. jodie_microsoft_smb says:

   August 24, 2010 at 5:49 pm

   Microsoft makes it easy for buyers to understand the SaaS contracts for their Online Services. Microsoft offers the BPOS suite and CRM Online as SaaS models and publishes financially backed Service Level agreements and Terms of Use on the solution website. Buyers can also see minimum requirements and pricing on the website to avoid confusion and a phone number or click to chat option is available to ask questions before you buy.

   SLA for Microsoft CRM: http://smb.ms/b2XXar
   FAQ and SLA for Microsoft Online Services: http://smb.ms/9Crzv9

   Hope that helps!
   Jodi E.
   Microsoft SMB Outreach Team
   msftoft@microsoft.com

   Reply
   • Jeremy Aber says:

     August 24, 2010 at 6:25 pm

     Jodi,

     Great points, however I do think that, for example the FAQ and SLA you reference above could be shorter and written with less verbiage. I find that most people don’t want to go through that much detail or read long paragraphs. It is kinda of an art to shorten them and write them in plain English, but I think the effort is really worth it. I do think the Msft FAQ is very comprehensive, but I suggest that is not the goal; maybe find the 10 most important issues that customers will likely need to know at list them on top, put the international issues in a different place; put more of the details in links, etc. Just a few suggestions (from my perspective at least) to make it easier to read.

     Thanks for the post!

     Jeremy

     Reply