SaaS, Cloud Computing and Hosting Contracts
Profiting from “The Next Big Thing” in Business Services
Many companies have heard that SaaS and Cloud Computing are the 'next big thing' in software systems, but really don't know if these new services are a good thing for their business. At the same time, the SaaS and Cloud Computing industries are in the early stages of working through their business models and the terms under which they provide their services.
The truth is that SaaS is simply the latest in a decades-old line of business models for remotely hosting applications, beginning with main frame data centers located downtown, and continuing with collocation, managed services, and application service providers (ASPs). None of these hosted computer processing models is dead. Besides technical differences such as virtualization processing and Web native programming, the only true difference between SaaS and the other hosting models is the risks and rewards each poses for businesses and how their corresponding contracts are written.
Our experience in the computer industry going back to the initial commercialization of the Internet gives us a 360 degree view of hosting services and the power to negotiate contracts that capture the best value business model, as well as guard against pitfalls like disguised perpetual licenses, onerous terms of use, and empty service level agreements (SLAs). SaaS and Cloud Computing vendors benefit from our expert knowledge of how evolving Internet regulations impact service delivery. SaaS and Cloud Computing customers benefit from our insights into the technology with which on demand systems deliver their services.
James River's SaaS Platform Disaggregation Analysis
Modeling On Demand Service Level Agreements (SLAs)
Business customers are rapidly moving towards SaaS, Cloud Computing and managed hosting of their systems. A generation of new managed service providers and products is entering the IT industry. Quality of service is becoming as important as content and functionality. Service providers and customers will begin to think more deeply about contractual service levels—what they cover, what they provide, how they are measured and reported, and how well they are backed up.
James River’s expertise in Internet services and outsourcing can guide both providers and customers in developing more effective and more comprehensive SLAs that go beyond conventional notions of technical reliability and service credits. Our Model On Demand SLA is a set of best practices for writing and managing SLAs.
James River's Model on Demand SLA
Recognizing SaaS Disaggregation
The “catch” with SaaS, Cloud Computing and all other remote hosting services is that the entire service is always the product of several providers. These providers are almost never coordinated in their contractual terms, meaning that the service guarantees made to customers are meaningless. James River calls this phenomenon Software-as-a-Disaggregation (SaaD™), and has extensively researched and written on the issues SaaD presents for enterprise customers. Our expertise in IT contracting means we can identify the disaggregated points in on demand computing services and employ contracts strategies to establish clear relationships with providers and to make service guarantees genuine and enforceable.