2013

Yearly Archives

  • SaaS Contract Negotiations Are Not All About the Software!

    saas negotiationsYea I know the $ and the functionality of the SaaS offering are important in any SaaS contract negotiations, but there is a lot more going in the mind of your buyers.

    I think the best metaphor for this, is from the book “Switch. How to Change Things, When Things are Hard.”  Imagine a rider on an elephant. How do you get the elephant to go where you want it to go? The rider is the logical (aka rational) part of the process, and the elephant is the emotional part. Sorry to tell you, but if the elephant wants to go left and the rider wants to go right, the elephant is going left. You really need both working together to go where you want to go. In terms of SaaS contract negotiations, if a customer is making the decision regarding buying your SaaS service, you have to speak to their rider (the logical decision making process) AND their elephant (the emotional part of the process). Let’s go through some examples.

    How to Influence the “Rider.” 

    • Cost
    • Functionality
    • ROI
    • Differentiation

    HOW TO INFLUENCE THE “ELEPHANT.”

    • Negotiating to a Win/Win (i.e. care about their issues and not just your issues).  
    • Having an easy to understand Model and Pricing structure.
    • Communicate reasons why your customer should trust you with their precious data (yep, to them it is precious).
    • Having a transparent and simple Security, Privacy, Disaster Recovery and Data Breach Policies.
    • Posting support terms and your SLA on the web.
    • Providing
  • Acceptance and Completion Criteria

    The Difference Between Acceptance and Completion Criteria in a SOW (View of a SaaS Attorney)

    SOWAs a SaaS attorney, I have been running into this issue a lot recently, so I thought it warranted a blog post.  What is the difference between acceptance criteria and completion criteria in a SOW, and why should you care? Well, there are many differences — with significant consequences — and you definitely should care. Let’s go through it.

    Acceptance Criteria. While this has many flavors of this concept in SaaS implementations, you usually see it drafted (by the customer) and it says something like “subject to acceptance” or “customer can accept, review and test the deliverables…” (i.e. a subjective measurement). The customer usually says something like, we need to check that what you deliver meets our requirements.(By the way, there are actually two flavors of customer acceptance wording–see chart below)

    Completion Criteria. This is a different way of addressing the same issue.  It is an objective measurement (i.e. not subject to distortions by prejudices or interpretations) of did you, for example ‘deliver’ the report to the customer or ‘hold’ the training session call.  Said another way, this is something you can prove or demonstrate, and is not subject to the interpretation or opinion of the customer of whether it was done or not.

    Why should I care?  As a SaaS attorney, I suggest you should care, as if you want to get paid, or are worried about …

  • Are you Selling Trust or SaaS/PaaS?

    Tractor holding Trust Sign - Aber Law FirmWell it is a little of both, but let me explain. I learned something about the Salesforce.com agreement that totally changed my thinking about SaaS and PaaS agreements, and service level agreements (SLAs): there is no SLA in the Salesforce.com agreement. Yep, you read it right; there is no SLA in their agreement. What Salesforce.com realized–and you need to remember– is that you are first and foremost selling ‘trust’. So Salesforce.com decided to spend less time negotiating the complexities of an embedded SLA in their SaaS agreement and instead publicized their SLA under a Trust Site.

    So, here is what every SaaS or PaaS business needs to know about Trust Sites.

    What is a Trust Site?

    A Trust Site is a public facing website on which you post your SLA (current and historical uptime performance . . . or whatever metrics your customers need to know to trust you), Security Policy and Privacy Policy. This is a pretty simple concept, but if you think about it you are actually taking it to another level by making this information public.

    Why They Did It.

    I don’t really know, but what I heard is that Salesforce.com was spending way too much time negotiating their SLA (how to measure it, how to determine and how to apply the credits, yada yada). This was unnecessarily extending the sales process, so they did some deeper thinking about the issue.

    They realized what customers really want to know about.

    1.     Know that …

  • Plain English EULA!

    https://www.aberlawfirm.com/wp-content/uploads/2013/01/windows-8.jpg-e1358783623908.png

    Microsoft Finally got it Right. They Created a Plain English EULA!

    software eulaMicrosoft drafted their new Windows 8 EULA in plain English and in a way that has never been done before (at least based on what I have read … and I read lots of EULAs).

    The New EULA Structure. It has 3 sections: (1) FAQ, (2) Additional Terms and (3) Limited Warranty. Now you may say that is not a big deal, well actually it is a big deal. The FAQ is part of the contract! Did you get that; the FAQ is part of the contract

    Here are some examples of the questions and answers within the EULA.

    q1

    q2

    What is really unique is that there is no license grant, but simply the question regarding how a user can use the software and the answer. This may usher in a new form of contract drafting, as if you think about it the reader of the EULA does not care about a license grant (or the legal formalities of license grants), but they do want to know how they can use the software. While I have never heard of court interpreting a contract with an embedded FAQ, I don’t see any reason why a court would not enforce it as written. Also, courts really like it when software vendors make their agreements more readable and understandable for consumers, so I think (hope) that the court will give them credit for drafting it in this manner if there were a …