The Tricky Bits of SaaS Contracts

For many decision makers of software and those in charge of purchasing business software, software as a service can be both novel and familiar at the same time. The underlying principles of contract negotiation have not been changed just because there is new trend that has been added to the word list.

As it turns out, you will still need to figure out how many seats you will require for any given application in order to determine the contract term (and additionally, seeking out better discounts). Generally, a software as a service contract will charge X amount of dollar every month (or on a quarterly basis) for Y number of end users.

If you are willing to negotiate, here are some timely tips to help you come up with the best contract for your saas applications. When you negotiate, make sure that you are able to differentiate between configuration and customization. You need to remember that your contract spells out what most vendors consider configuration and what they also mean by customization. Keep in mind that the former is usually free while the latter is somewhat expensive. If you do not get to have clear look at this, your supplier might dish out some customization fees that you might get surprised about. Along this line, make sure you look at the stability of the provider. This is highly important because at some point you will need to consolidate. Therefore, you will need an exit strategy as well as the skill to negotiate a form of transition support.