Anatomy of a SaaS Contract ... in Terms Even Non-Lawyers Can Understand

EDITOR'S NOTE: Special thanks to Jean Morgan for writing today's blog post. You can connect with her on LinkedIn. 

According to a recent HIMSS Analytics Survey, over 83 percent of healthcare organizations are already using cloud technology.  It allows both hospitals and patients to access information in a cost-efficient way. So, what should you expect when you receive a contract for cloud services?  

Glad you asked. Check out our anatomy of a SaaS contract in language anyone can understand.

1. Who is agreeing to what???  
   The first party is “You” the second party is “Them.” You both promise to work together nicely.
2. What's the purpose of the Contract?
   It is just an agreement that tells both parties what you can and can not do.  Simple, right?
3. Why do you define certain terms within the Agreement?
   Well, it is amazing how many different ways you can define the “product” or “service.” Companies want to make sure you know exactly what you’re purchasing. Do I get monthly food baskets with the service??? Free iPad?? 3 months of Netflix? Be sure to pay attention to these so everyone’s expectations are met!
4. How long are we in this relationship?
   Let’s decide just how serious we are about this relationship.  Are you ready to commit for the long haul or just dipping your toe in the water?  Will I get a better deal if I commit for three years rather than monthly? Will this be a lifelong love story? It's up to you and your team to decide what works best for you within the vendor's capabilities.
5. What do I need to do?  
   Keep your viruses to yourself.  Don’t mess with or hack our computers.  Don’t try to be tricky and access information that doesn’t belong to you. Other than that, we will get along!
6. What does “Them" need to do?  
   In our case, where Pulsara is "Them" in your contract, we will make sure you get the product and service that you expect, when you expect it. We also are responsible for making sure  information is safe and secure. You don’t want stray data walking around without some sort of protection.
7. What promises are made in the contract?
   This is where “Them” makes their important promises that the product/service is fabulous and will work just how they say it works.  BUT, they can’t be responsible for everything. If your internet goes down or you are using a computer from the 1990s, chances are you shouldn’t expect optimal performance from your cloud product.
8. Who owns what in this deal?  
   We let you use our service, but you don’t own it.  So be nice and don’t try to take what isn’t yours.
9. What if we decide we don’t get along?   
   If the parties have a problem they will first get together discuss the problem.  You chat about it to see if there is any way you can both walk away happy. If that doesn’t work, I guess it means we are spending the big bucks on lawyers!  Nobody wants that!
10. Let’s finish up this agreement with the “boilerplate.”
    Basically these are terms that don’t have much in common and don’t really fit anywhere else in the contract - Where will we go to court if we can’t agree? Who will pay for the legal fees? Can I assign this agreement to someone else?  Does this agreement give me an other rights beyond use of the product/service?

Cloud services are here to stay.  Make sure you understand your SaaS contract and develop great relationships with your providers!