Transforming Traditional Software Licenses into SaaS Contracts: A Quick Checklist

Can I use an existing licence agreement as a SaaS contract? No.

Are you sure? Yes.

But I want to?

Okay, a licence can be a start, but not the end!!

The transition from traditional software licensing to SaaS models requires a careful adaptation of contractual terms. Here's a few points you will need to carefully consider:

Core Considerations:

• Right to Access vs. License: Instead of granting a "right to use" the software, SaaS contracts focus on providing a "right to access" the hosted services.

• Service Level Agreements (SLAs): SaaS agreements typically include SLAs that outline performance metrics such as uptime and response times.

• Data Management: Since data resides in the provider's hosted environment, data ownership, privacy, security, return procedures, and storage costs become paramount considerations.

Key Contractual Provisions:

• Payment Terms: SaaS often employs subscription-based models with periodic payments, contrasting with the upfront fees of traditional software licenses.

• Suspension Rights: SaaS providers may reserve the right to suspend service under specific circumstances, such as non-payment or security breaches.

• Online SaaS Terms & Updates: SaaS terms are often dynamic and can be updated by the provider.

Specific Considerations:

• Data Ownership: Clearly define who owns the data generated or stored within the SaaS environment.

• Data Privacy: Address data privacy and protection measures, especially in light of regulations like GDPR.

• Data Security: Implement robust security measures to mitigate data breach risks.

• Data Return: Establish procedures for data retrieval by the client upon termination of the agreement.

• Data Storage Costs: Outline data storage fees, including potential tiered pricing and procedures for additional storage.