Case Study: SaaS
(Software as a Service) Provider
A privately held software company sells a document management system to hospitals so they can organize and retrieve regulatory compliance information. Hospitals striving for lower IT maintenance costs, and pressure from the software company’s own equity investors, has lead the CEO to replace the software license sales operations with a software as a service (SaaS) model.
Does the company continue to use its form licenses to sell the service? Will the company now be liable if the hospitals are fined for regulatory violations or sued for malpractice? How can the company offer contractual guarantees to the hospitals if it doesn’t own either the data center hosting the application or the broadband network? Is it now responsible for protecting patient data under HIPPA?
James River goes through all of these scenarios with the software company’s executive management and sets up an online contract that spells out in clear language both the company’s and the hospitals’ roles and responsibilities. The contract avoids taking a shot gun approach to protecting against liability that will deter the hospitals from continuing as customers.
