An Internet business owner typically needs a software services agreement when the company offers software as a service (SaaS) to clients via hosting on the business’ servers or through cloud hosting by a third party (e.g. Amazon S3).
In other words, the Internet company offers centralized hosting of on-demand cloud software for clients to use. This contrasts with traditional software (such as a desktop application) that is installed on the client’s computer(s) from a USB flash drive, from a data CD, or after downloading from the company’s website.
When you sell software as a service, some of the issues you will want do discuss with the Internet lawyer who drafts your software license agreement include…
1. Will you be paid an upfront licensing fee, monthly fees, or by some other method?
2. Are updates included with the license?
3. What types of restrictions will you place on client use of your software?
4. How many people can use your software per license?
5. If the client becomes upset, how will disputes be handled to limit your liability?
When drafted properly by an experienced software lawyer, a software services agreement can protect your company when it offers software as a service to clients.