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.
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.