How to successfully negotiate SaaS cloud customer service agreements and contracts. As a SaaS lawyer located in New Jersey just outside of New York City my experience in helping SaaS and software clients and having launched my own SaaS company with partners has SaaS companies seeking my legal advice from all across the United States, Europe and internationally about how to go about negotiating SaaS Cloud Enterprise Agreements.
The two biggest factors for a small SaaS vendor or provider are time and money. You need revenues to keep going and you don’t have the time to deal with how long it might take you to sell your services or application to a typical enterprise client. What can you do to cut down on the amount of time it will take between getting your foot in the door and having an executed contract? The single biggest factor effecting how long it will take to get an executed contract besides money and if the prospective client wants to spend money on your product is finding the right key decision maker in the enterprise company who is going to be the champion for your product and continually run it up the flagpole until the deal is done.
So how do you go about finding that key decision maker? I’m not going to lie to you it is a very challenging process based upon a myriad of factors. For starters, when you think about the dynamic of your smallish SaaS company compared to the size of a multi-billion dollar enterprise company you are more willing to take chances and risks with how you operate your company because you are continually fighting time and money. I have a colleague who is in a startup and as quickly as he closed one round of funding he said they were back at it preparing to do the next raise. Contrast that with a multi-billion dollar company you are trying to sell to that might have thousands of potential employee users for your product that has a budget and layers upon layers of decision makers. They are not so willing to take the risks your company will because one bad decision could have a catastrophic effect on the company.
The mindset that you are trying to crack in the simplest of terms is risk. You might meet or connect with someone you believe is the decision maker only to find out they have no power or juice inside the company to approve of the deal. Or, you might meet that decision maker who can sign off on the deal but won’t because they are unwilling to risk losing their job if your product fails to deliver or live up to expectations.
What you need first and foremost to get the decision maker over the risk component is a superior product that will offer tremendous value to the client in the marketplace. Even if you don’t have a ton of clients but can demonstrate that you have the best product out there and it is going to help the client move the needle or accomplish its goals with minimal risk or no more risk than any other solution this should be enough to get over any risks the decision maker might have about your company’s product.
With that said, you need to find the decision maker who is looking for the type of SaaS product your company has developed to solve a problem. If your product solves for the client’s problem and the risk factor involved in using your product is minimized or understood by the client you have a pretty good shot at getting the decision maker to get your company into the contract negotiating process.
Then the real fun begins. What clients quickly learn is that there are major differences in trying to sell a SaaS product to an enterprise company and a non-enterprise company. With that latter, these types of businesses typically do not hire legal counsel to review SaaS agreements and usually come back with very few requested contract changes. And, they are not as familiar with the typical enterprise business operational concerns such as data security and protecting customer data and information so your company might not take on as much liability as you would with a typical enterprise agreement.
Don’t be surprised if the response you get from a prospective SaaS enterprise customer after sending your company’s proposed SaaS agreement is “thank you but no thank you we will use our own agreement.” Unfortunately, SaaS enterprise customers have major leverage over a much smaller SaaS vendor and can place demands on your company that companies of your size simply do not have the legal budget, firepower or wherewithal to do.
You need to be prepared to negotiate legal terms and language into the contract that deal with exclusivity of use, security, data breaches, and service level agreements which means that your company will guarantee that your services will be up and running for a guaranteed time, i.e, 365, 99.5% of the time. You will also be asked to take on a lot of liability in the event there is a data breach or hack and the customer or their customer’s data or information is stolen or compromised while using the services. The customer is also going to want maintenance, support and training included in the contract subscription fee.
You need to be prepared for a challenging process. It could take a year after getting your foot in the door to actually get a signed contract. It could take weeks before the customer responds back to a simple email. As a small company you have no layers yet. With an enterprise customer your decision maker might need to talk to two other upper level managers or direct reports to get an answer to your email.
From his offices in New Jersey located just outside of New York City, Andrew represents and helps SaaS and software customers, end-users and the enterprise that use SaaS products, applications and services draft, negotiate and structure the deals and technology transactions that are essential to their businesses. Andrew provides legal advice to companies located in New Jersey, New York, Boston, Connecticut, Atlanta, Chicago, Washington D.C., Dallas, Florida, Ohio, California, Austin, Texas, Maryland, North Carolina, Massachusetts, Colorado, Utah, San Antonio, Austin, San Diego, Los Angeles, Silicon Valley, San Francisco, Houston, Salt Lake City, San Jose, Miami, Tampa, Orlando, St. Petersburg, Ft. Lauderdale, West Palm Beach, Phoenix, Denver, Boulder, Nashville, Memphis, Kansas City, Raleigh, Charlotte, Indianapolis, Philadelphia, Pittsburgh, Pennsylvania, Minneapolis, St. Louis, Cleveland, Columbus, Baltimore, Cincinnati, and Las Vegas.
Andrew works exclusively on a fixed-fee subscription basis offering flat rate billing legal fees packages for the drafting of legal documents, contracts and agreements.
Because he concentrates solely on technology transactions, experienced SaaS and software lawyer Andrew S. Bosin can provide affordable, cost effective in-house type outside general counsel services and legal advice in putting together your company’s day to day business, sales, development and licensing deals. Concentrating in a niche area of technology enables Andrew to focus on your legal needs learning what your objectives and goals are and developing creative strategies to help you maximize your intellectual property and profits.
Andrew drafts, negotiates and reviews legal contracts and agreements including, SaaS Subscription Agreements, Master Service Agreements, Enterprise Customer Agreements, Service Level Agreements, Technology Development Agreements, End User Licensing Agreements, Technology transactions, Technology contracts and agreements, Technology licenses, technology agreements, Software license agreements, Software licensing agreements, Intellectual Property (IP) Licensing & Transfer Agreements, Mobile App Development Contracts and Agreements, and Mobile App Licensing Agreements.
SaaS lawyer Andrew S. Bosin is located in New Jersey just outside of New York City.
Please call Andrew for a free consultation at 201-446-9643.
www.njbusiness-attorney.com | andrewbosin@gmail.com
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