Case Study: SaaS
(Software as a Service) Provider
A privately held software company sells a document management system to hospitals to manage triage of cases in emergency rooms. The market for emergency triage software is crowded with not just software OEMs but by homegrown applications written by doctors. Further, hospitals are always looking to cut costs. Pressured by the software company’s equity investors, the CEO makes a decision 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 HIIPA?
James River can take care of all the contractual requirements needed to relaunch the company’s product as SaaS. James River goes through all of the transaction-based risks and legal issues created by SaaS with the software company’s executive management. The shrink wrap license agreement is replaced with an online subscription contract that spells out in clear and simple language both the company’s and the hospitals’ respective roles and responsibilities. The contract avoids taking a shot gun approach to protecting against liability that will deter the hospitals from continuing as customers. On the product development end, James River manages all sourcing and negotiation fro associated component services with third party on demand service providers.
