Key points in SaaS deals
1. What is the client preferred method of charging? By usage, user count, fixed mthly fee?
2. What need is there for flexibility/ scalability – down as well as up?
3. What are the exit provisions, either at contract end or at termination?
4. Note: In UK SaaS providers which qualify as SME’s have statutory right to claim interest on late payments at a rate of 8% above the Bank of England base rate
5. What are all the cost elements – inc. the cost of data storage? Sometimes with a third party
6. What are the step in rights to the infrastructure supplier?
7. Is a Data escrow agreement required?
8. Is a Source code escrow agreement practicable for the service?
9. What hours of operation are needed 24 x 7, 12 x 5? What time zone, GMT, European, US.
10. Does the SaaS supplier take governance for the infrastructure supplier?
Contact us if you’d like to discuss more of the things to be aware of when buying SaaS services.
Market Intel & Tips
Vendor Management: flash survey
- You have a portfolio of >20 tech suppliers?
- Any contracts that have auto-renewed for 2 yrs or more without review?
- You would benefit from knowing a supplier’s product development roadmap?
- You frequently have to micro-manage a relationship e.g. invoicing problems?
- Contracts get forgotten about once signed?
- You are reliant on some suppliers but your contract terms with them are standard / poor?
- Any suppliers that deliver poor quality?
- Any suppliers with long-term relationships with your competitors?
- You have corporate pressure for better risk management and compliance?
- If you have answered ‘yes’ three or more times, it’s likely that some vendor management will improve your position and bear some real fruit
For a way to address the myriad of small but important tasks required to address this, click here.
“In addition to hardware, operating system software, and telecommunications equipment and services — information resources traditionally acquired in the marketplace — organizations now turn to outside providers for many components of their application systems, application development and integration, and a broad variety of system management services. Yet despite this trend, there has to date been little, if any, research investigating the IT procurement process.”
Robert Heckman, IT Today
Turnstone research shows that less than 5% of IT staff receive any formal procurement training, chiefly relying on their own particular experience. Considering that personal experience realistically covers a limited part of the market, and how fast the market moves, it makes sense to look at some staff training, to build on existing skills.