Master Contract for Cloud Services - Software as a Service (SaaS Master Agreement)

This contract sets out the contractual framework between the provider and the customer whereas the specific services and remuneration are defined in the annex.

Software as a Service (SaaS) is a typical sort of cloud computing (SaaS). Due to the diversity of available cloud services, it is in the mutual interest of the contractual partners that the services owed in each case are precisely described in the corresponding contract. Under the Software as a Service (SaaS) contract, software (functionality) is made available for a limited time via the Internet. It is the most popular and oldest offer among the XaaS services. The provider is the owner and holder of the rights to the SaaS software or is authorized to operate the SaaS software in the cloud. He offers the SaaS software together with the basic software necessary for its operation for use by the customer via a data network. The client’s use of the SaaS software is via remote access with mobile or fixed-end devices of the client. The SaaS software is not installed on the client’s (end) devices.

This last aspect differentiates the SaaS agreement from a software license agreement. Contrary to a licensing deal, the customer does not put software on a computer — or copy it at all. If the customer puts a copy on a computer — if it’s on-premise software — the contract needs to include a copyright license. In a SaaS deal, the software is hosted on the provider’s servers (or those of their hosting providers, and the customer just accesses it. With no copies, the customer doesn’t need a copyright license. Rather, they need simple permission or access, which they pay for as a subscription. In other words, the customer gets a service, not software.

Also, SaaS agreements seldom contain maintenance clauses. Rather, they need service levels to be agreed upon (typically in a Service Level Agreement). The provider hosts the software and must keep the system running. Consequently, SaaS agreements don’t need updates and upgrade clauses. Since the provider hosts the software, it provides any revisions as a matter of course.

Compared to an IaaS agreement, which only covers the provision of the IT infrastructure (servers, networks, data storage), the SaaS agreement governs the provision of the software respectively the ready-made application (which also includes the IaaS services).

In practice, the SaaS agreement often contains or refers to other documents (price lists, specifications, offers, etc.) or agreements. For example, the processing of the customer’s data by the provider is usually covered in a data processing agreement.