Types of Agreements used in SaaS Industry

13 March 2023

The Software-as-a-Service (SaaS) industry has become a vital part of modern businesses, providing a cost-effective and efficient way to manage software needs. With the growing popularity of SaaS, it’s important to understand the different types of agreements that are used in the industry. These agreements define the terms and conditions of the SaaS service and help protect both the provider and the customer.

Full Form End User Licensing Agreement Terms of Service Service Level Agreement Master Service Subscription Agreement
When is it used? When a copy of the software program is licensed to the end-user for the purpose of installation and use on a system such as a laptop/ computer or mobile. When there is a need to regulate the use of services by any of the users.
This is more particularly used when the service provider is more reliant on third parties for providing the services or when the product developed is relatively new and no specific service level can be guaranteed. 
When there is a need to establish clear and measurable guidelines for service being provided such as performance metrics, technical support, etc. Used for any type of service provided in lieu of subscription fees. 
Does it apply to SaaS? No, as no service is being provided but a copy of the software is downloaded and used as a physical product. Yes Yes Yes 
What is covered? Granting any user, a license to install and use a copy of the copyrighted software and/or application.
However, the ownership of the software remains with the company or the developer.
This provides a defence against copyright infringement, software reverse engineering, and misuse of the software.
General rules and regulations for the use of any software which is provided as a service, to any user, such as permitted uses, third party integration, restrictions on use and reverse engineering, termination and grievance redressal. Covers the performance specifications for any type of software which is provided as a service, such as the quality, uptime, etc. general or specific to oneself or one service recipient. 
This helps in retaining customers in the long run as the service provider provides specific service commitments.
Covers all aspects regarding the provision of services such as terms of access granted to the software, liability, indemnifications, disclaimers, warranties, payment terms, termination, etc.
Examples 1.   Microsoft computer software https://www.microsoft.com/en-us/windowsvirtualdesktop/eula 
2. Apple applications such iTunes https://www.apple.com/legal/internet-services/itunes/dev/stdeula/
3. Grammarly software https://grammarlysoftware.com/terms-use-eula
1. Zoho https://www.zoho.com/en-in/terms.html
2. Byjus application  https://dbel-us.byjus.com/legal/terms-of-service.html 
3. Chargebee https://www.chargebee.com/company/terms/
1. Zoho: https://www.zoho.com/people/help/adminguide/SLA.html
2. Whatfix: https://support.whatfix.com/docs/service-level-agreement-sla
3. WebEngage: https://webengage.com/sla/
1. Whatfixchrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://whatfix.com/wp-content/uploads/2021/11/MSA-India-Clean-Template.docx.pdf     
2. Digital Hotelier: https://www.digitalhotelier.com/msa/
3. Salesforce:



In conclusion, understanding the different types of agreements used in the SaaS industry is crucial for both providers and customers. It ensures that both parties are aware of the terms and conditions of the service, and helps to establish a clear and mutual understanding of expectations. By choosing the right agreement for your SaaS service, you can protect your business interests, minimize risks, and build a successful and long-lasting relationship with your customers.



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