SaaS On A EULA? Get Some New Pants!

SaaS on a EULA? Get Some New Pants!

A good contract is like a good pair of pants. When the pants fit right and look good, you wear them all the time and hardly notice them. But if they’re too tight, you won’t buy them and if they’re too loose they fall down and leave you exposed. And if they’re just wrong – like trying to pair hockey pants with a suit coat – nobody knows what to do with you.

As more and more software companies deliver SaaS instead of software CDs, why do I still see so many EULAs? They aren’t quite as bad as hockey pants with a suit, but I’d say they approach wearing hockey pants for skiing. Yes, they’re warm and in the winter sports category but they leave a lot of bare leg and have way too much unnecessary padding.

First let’s talk about the fundamental differences between licensed software and SaaS. One is a right to take a copy of some technology to your home or office, install it on your computer and use it all by yourself (or with the other users in your company). Your data stays with you. The other is a service provided by a vendor which allows you to input and review data that is processed somewhere else. No software is delivered. No copies of technology are made for the users. But your data is processed and stored outside of your computer.

So, one is a license – a right to get a copy and use IP – and the other is a service – that processes and stores information. They really are different pants even if software is involved in both.

The legal community has done a good job of drilling the importance of protecting IP into software developers. Yes, intellectual property rights are what make that wonderful technology valuable. Tie them up tight in your license agreement, use license keys and other mechanisms to control users and audit them to make sure they aren’t proliferating without paying.

But do you know the best way to protect IP? Don’t share it. Don’t let anyone see it or get a copy. In other words, use it to deliver a service: SaaS. No license is required when IP isn’t shared (There go the huge pads on the hockey pants). And granting a license for IP that isn’t delivered could result in the unintended requirement to deliver it (Those pants fall right down around the ankles).

The legal community hasn’t done a good job of advising SaaS users of the risks of losing control of their data and the means to process it themselves. SaaS customers under a EULA don’t get any assurances about how the vendor will protect their data (Those hockey pants are too short for the slopes). They don’t know what kind of backup procedures the provider has or how to get their data back in a meaningful format. Because the contract won’t address data issues at all, it doesn’t even say that the client owns its data (Get me some ski pants!).

In summary, my last pants analogy: if you’re selling SaaS with a EULA, get some new pants.

By Cindy Wolf

Cindy Wolf is a Colorado lawyer with more than 25 years experience representing large and small domestic and multinational companies. Her expertise is in helping companies enter the cloud safely, either as providers or users. She also practices in the areas of corporate law and commercial contracting, with an emphasis on international issues. She can be reached at cindy@cindywolf.com.

Follow Us!

CloudTweaks

Established in 2009, CloudTweaks.com is recognized as one of the leading authorities in cloud computing information. Most of the excellent CloudTweaks articles are provided by our own paid writers, with a small percentage provided by guest authors from around the globe, including CEOs, CIOs, Technology bloggers and Cloud enthusiasts. Our goal is to continue to build a growing community offering the best in-depth articles, interviews, event listings, whitepapers, infographics and much more...
Follow Us!

Sorry, comments are closed for this post.

Join Our Newsletter

Receive updates each week on news, tips, events, comics and much more...

Can I Contribute To CloudTweaks?

Yes, much of our focus in 2015 will be on working with other influencers in a collaborative manner. If you're a technology influencer looking to collaborate with CloudTweaks – a globally recognized leader in cloud computing information – drop us an email with “tech influencer” in the subject line.

What is the 12/12 Program?

This program is designed to better handle the thousands of requests we receive from people looking to submit articles. The 12/12 program is the commitment of 12 articles delivered over a 12-month period.  

Wait! What if I just want to submit one article?

Our popular pay as you go sponsorship program provides the flexibility to submit as you wish and is designed for all budgets.

Contributors

Ten Tips For Successful Business Intelligence Implementation

Ten Tips For Successful Business Intelligence Implementation

Ten Tips for Successful Business Intelligence Implementation The cost of Business Intelligence (BI) software goes far beyond the purchase price. Time spent researching, implementing, and maintaining your BI investment can snowball quickly and mistakes are often expensive. Your time is valuable – save it by learning from other businesses’ experiences. We’ve compiled the top ten

Knots And Cloud Service Providers

Knots And Cloud Service Providers

How Do These Two Compare? In Boy Scouts, I learned how to tie knots. The quickest knot you can tie is the slipknot. It’s very effective for connecting one thing to another via the rope you have. It was used in setting up tents, mooring boats to docks temporarily and lifting your food up into

What Ever Happened To Google Glass?

What Ever Happened To Google Glass?

What Ever Happened to Google Glass? It was supposed to be the next big thing in tech so where did it go? Last year you could not go anywhere without hearing about some insane new use for the product and now it seems to have vanished in a plume of smoke. A Lackluster Rollout Back

Posted on by

Big Data

To Have and Have Not: Big Data Initiatives In Developing Countries

To Have and Have Not: Big Data Initiatives In Developing Countries

Big Data Initiatives In Developing Countries The poor of the developing countries are becoming increasingly connected, to the point where they too are part of the Big Data revolution that’s happening across the globe. It didn’t come with laptops, though, as some supposed it would. Whereas it costs a fortune to connect broadband to a

Big Data In Your Garden: Initiatives For Better Understanding Nature

Big Data In Your Garden: Initiatives For Better Understanding Nature

Big Data in Your Garden Big Data and IoT initiatives are springing up all across the globe, making cities, protesters–and just about everything else–smarter. However, thus far there’s been little attention paid to the interactions between these bizarre technologies and living things other than humans. Biology, that is, human biology is one field where Big

Who Holds the Key to the City: Big Data and City Management

Who Holds the Key to the City: Big Data and City Management

Big Data and City Management Cities like New York, Madrid, and especially Rio de Janeiro are augmented with Big Data-powered initiatives that range from combating crime with predictive analytics (New York & Madrid) to providing real-time data for improved management. Although Big Data is no panacea and is mainly used in conjunction with a greater

Internet of Things

Where’s the Capital of the Internet of Things?

Where’s the Capital of the Internet of Things?

Where’s the Capital? We all know the capitals of fashion are London, New York and Paris, while the capital of film is Hollywood (or Bollywood!) – but what’s the new capital of the internet? Specifically, the internet of things? The answer – according to new research by Ozy – might surprise you. It’s not Tokyo, Seoul,

Smart Cities – How Big Data Is Changing The Power Grid

Smart Cities – How Big Data Is Changing The Power Grid

Smart Cities And Big Data As Anthony Townsend argues in his SMART CITIES, even though the communications industry has changed beyond recognition since its inception, the way we consume power has remained stubbornly anachronistic. The rules of physics are, of course, partially to blame, for making grid networks harder to decentralize, as opposed to communication

Aggregated News

Popular News Sources

An Entrepreneur Ate a Smart Pill to Show How to Track Your Data

An Entrepreneur Ate a Smart Pill to Show How to Track Your Data

SYDNEY — One entrepreneur from Melbourne is putting his health on the line for the love of his new app. Chris Koch ate a device inside a tablet at 12 p.m. local time on Monday as part of a competition to promote his business, Pop!, to prove you can keep track of your data anywhere. Even

Q&A with Futurist Martine Rothblatt

Q&A with Futurist Martine Rothblatt

If computers think for themselves, should they have human rights? Bina48 is a robotic head that looks and speaks like a person—it moves its lips and runs conversational software. Although the robot isn’t alive, it’s hard to say there is no life at all in Bina48. In conversation, it sometimes says surprising things. Google’s director

SAP Cuts Outlook

SAP Cuts Outlook

Enterprise software provider SAP AG lowered its earnings outlook for this year, even as it reported a 15% increase in third-quarter net profit, boosted by growth in subscriptions for its cloud-based software products. Read the source article at online.wsj.com About Latest Posts Follow Us!CloudTweaksEstablished in 2009, CloudTweaks.com is recognized as one of the leading authorities in