As we continue to discuss the questions to ask when evaluating and selecting a SaaS vendor, we cannot ignore the importance of the contract negotiation process. While most SaaS vendors are committed to the success of their customers, there are more than a few who are simply out to make a profit, even at the client’s expense.
In fact, according to a recent article on Datamation.com, “they might promise ‘on-demand’ services and promote ‘pay-as-you-go’ subscription pricing, but the reality is that you often have to go through a series of steps to get their SaaS apps up and running, and typically have to pay in an advance to use the apps.”
So, you want to make sure you don’t get locked into a contract that benefits your provider more than it benefits you.
Making Sure Your Contract is Fair and Flexible
In order to make sure the terms of your contract are fair, reasonable, and flexible, you need to as for specific details about your contract options. For example:
• What is the subscription mechanism?
• Can I pay as I go?
• Can I get special terms with a long-term contract?
What to Look For
Be sure to choose a vendor with:
• Convenient, flexible contract options to address the widest range of budget needs. For example, you should be able to “pay as you go” on a month-by-month basis, or if you choose, pre-pay upfront for your subscription (at a substantial discount, of course).
• An effective and efficient subscription mechanism that makes it easy to renew, add new users, expand capabilities, etc. at any time.
• Special pricing for customers who enter into longer-term commitments.
• The ability to cancel use of the service, at any time, without penalty.
Next week, we will investigate single vs. multi-tenant environments. Read our prior blog posts to learn more about what to ask in the areas of security, data retention and ownership, performance and availability, support, enhancements and upgrades, integration, and usability.
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