SaaS is the common abbreviation used for “software as a service”. You may know this under another name, for example ASP services (application service provider), software on demand or software subscription services. These names all refer to the same thing – software being made available to users via the Internet.
Unlike standard software, with SaaS you are not given a copy of the software – on a cd or installed on your computer. Instead you rent access to software. No permanent access or ownership in the software is given to you. You are simply given the right to access the software in return for paying a subscription fee. When you stop paying the fee, you no longer have the right to access the software and will no longer be able to use it.
What is a SaaS Agreement?
A SaaS agreement is the name given to the agreement between a SaaS supplier and a SaaS customer which sets out the terms under which SaaS software may be used and accessed. This will usually include a service level agreement (SLA). SaaS agreements are also sometimes referred to as subscription agreements, subscription licences or ASP agreements.
Differences between a SaaS Agreement and a Standard Software Licence
A SaaS agreement differs from a standard software licence in that:
- the SaaS customer will not usually receive a physical or installed copy of the software on their computer
- no ownership in the SaaS software will be transferred to the SaaS customer
- the customer’s right to use the SaaS software will end upon termination of the SaaS agreement.
In a SaaS agreement the customer is simply “renting” access to the SaaS software for the duration of the SaaS agreement.
Is a Service Level Agreement (SLA) a Software Licence?
No. A service level agreement (SLA) sets out the SaaS services being provided in addition to the right to use the SaaS software. These will usually include:
- hosting of the SaaS software on the SaaS Supplier’s server
- hosting of the SaaS customer’s data on the supplier’s server
- provision of customer support services in relation to use of the SaaS software; and
- provision of software maintenance services to update and maintain the correct functioning of the SaaS software.
image courtesy of Sam Howzit