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.

Comics

At CloudTweaks, we're plugged into the cloud, the internet of things and all that the web has to offer. From wearable technology, to mobile computing, cloud computing and big data, CloudTweaks is your source for updates and news on the most innovative technology.

Popular

Top Viral Impact

Five Signs The Internet of Things Is About To Explode

Five Signs The Internet of Things Is About To Explode

The Internet of Things Is About To Explode By 2020, Gartner estimates that the Internet of Things (IoT) will generate incremental revenue exceeding $300 billion worldwide. It’s an astoundingly large figure given that the sector barely existed three years ago. We are now rapidly evolving toward a world in which just about everything will become…

Cloud Computing Adoption Continues

Cloud Computing Adoption Continues

Cloud Computing Adoption Continues Nowadays, many companies are changing their overall information technology strategies to embrace cloud computing in order to open up business opportunities.  There are numerous definitions of cloud computing. Simply speaking, the term “cloud computing” comes from network diagrams in which cloud shapes are  used to describe certain types of networks. All…

Cloud Infographic: The Education Of Tomorrow

Cloud Infographic: The Education Of Tomorrow

Cloud Infographic: The Education Of Tomorrow  Online Education is a very exciting topic for many as it opens up many new doors and opportunities. We’ve touched on areas such as Massive Open Online Sources (MOOC) which provides tremendous levels of cloud based interconnectivity. We’ve taken a look into higher education,  the increased demand for online courses as well as…

Cloud Infographic – Big Data Survey: What Are The Trends?

Cloud Infographic – Big Data Survey: What Are The Trends?

Jaspersoft Big Data Survey Shows Rise in Commitment to Projects and Decline in Confusion Nearly 1,600 Jaspersoft Community Members Participate in Second Jaspersoft Big Data Survey San Francisco, February 4, 2014 – Jaspersoft, the Intelligence Inside applications and business processes, today shared results from its Big Data Survey. Nearly 1,600 Jaspersoft community members responded to…

Cloud Infographic – Cyber Security And The New Frontier

Cloud Infographic – Cyber Security And The New Frontier

Cyber Security: The New Frontier The security environment of the 21st century is constantly evolving, and it’s difficult to predict where the next threats and dangers will come from. But one thing is clear: the ever-expanding frontier of digital space will continue to present firms and governments with security challenges. From politically-motivated Denial-of-Service attacks to…

Featured Sponsors

The Internet of Everything Opens Up The World

The Internet of Everything Opens Up The World

Shaping The World With New Technologies As a connected collection of intelligent objects, the Internet of Everything promises to open up those areas of the world hardest hit by economic, political and agricultural blights. Relatively inexpensive devices, paired with revolutionary energy sources and unprecedented access to information offer great promise to farmers and workers in…

2015 Advertising Opportunities - Find Out More!

Cloud Logo Sponsors

hp Logo CityCloud-PoweredByOpenstack-Blue square_logo_100x100-01
cisco_logo_100x100 vmware citrix100

Established in 2009, CloudTweaks is recognized as one of the leading influencers in cloud computing, big data and internet of things (IoT) information. Our goal is to continue to build our growing information portal, by providing the best in-depth articles, interviews, event listings, whitepapers, infographics and much more.

Contact

CloudTweaks Media
Phone: 1 (212) 763-0021

Join Our Newsletter