Software-as-a-service (SaaS) agreements can create complex commercial relationships. How can you simplify the contract to make it easier to agree?
This deep dive explores what SaaS agreements are, who they affect, how to simplify both the process and the content of the contract, and the benefits on offer if you do. Use the navigation below to find out more, or explore our deep dives on more specific contracts, like NDAs and MSAs.
What’s a SaaS agreement? | Who do SaaS agreements affect? | Why simplify SaaS agreements? | How to simplify the SaaS agreement process | How to simplify SaaS agreement content | Useful features | Learn more
What’s a SaaS agreement?
Software-as-a-service (SaaS) is the business model behind B2B tech titans like Salesforce, HubSpot and Zoom. Software companies provide their platforms in-browser through a subscription model that guarantees recurring revenue, instead of delivering on-premise solutions that are paid for once and installed.
A SaaS agreement is the commercial contract that sets out the formal relationship between the SaaS company and its customer. It might be a contract covering a pilot, a trial or an auto-renewing annual subscription supported by an MSA (which could be viewed as a subset of SaaS agreements). What all these types of contract have in common is that they facilitate the provision of services to the customer in exchange for recurring revenue to the business.
The SaaS agreement is a key touchpoint between company and customer – making it needlessly complex and difficult to read will set a bad tone for the relationship that follows
Who do SaaS agreements affect?
SaaS agreements have various stakeholders across a company, including:
Legal counsel. The in-house legal team will own the template and guard the business against risk, controlling versions and making sure terms are favourable to the company.
Salespeople. Account executives and sales managers are usually responsible for securing signatures on SaaS agreements, and doing it as quickly as possible. Their focus in negotiations will be on commercial terms like price, billing manner and frequency, and number of users.
Sales operations. Sales ops managers typically own the process through which SaaS agreements flow – particularly if it’s a workflow that integrates with a CRM like Salesforce.
Approvers. Depending on the company’s stage and size, various internal stakeholders might need approval rights over the contract. These could include customer success, product teams (if there were feature commitments, for example) and finance leadership (if there are bespoke billing/invoicing arrangements that might affect forecasting).
Authorized signatories. Who these are will vary from company to company.
Customers. The end-user buying the software is of course an important stakeholder in the contract.
Why simplify SaaS agreements?
Just because contracts establish a formal relationship, with all the legal rights and responsibilities that involves, that doesn’t mean they have to be intimidating and unpleasant. The SaaS agreement is a key written touchpoint between the two parties. Making a SaaS agreement needlessly complex and difficult to read will set a bad tone for the relationship that follows. And given that relationship may continue for years to come, you need to make sure it’s built on solid foundations.
Contracts should strive to be accessible, persuasive and user-friendly, regardless of the subject matter. SaaS agreements can cover a huge range of issues, from liability caps and indemnities to data use provisions and marketing activities, making it even more important to strive for simplicity. The easier a SaaS agreement is to read and collaborate on, the better chance it has of being signed to everyone’s satisfaction.
Choose a contract collaboration platform that works with contracts as dynamic, digital data models, so everything is structured and searchable from day one
How to simplify the SaaS agreement process
Often, the two things that complicate the SaaS agreement process are using multiple tools and file-based workflows.
Find one platform that does it all
The manual SaaS agreement process usually means finding the right version of a Word document (or worse, a scanned version of something printed), wrestling it into shape over email, negotiating in tracked changes, converting to PDF, getting it into DocuSign, saving it somewhere sensible, and sending it to all parties.
Find one platform that can handle the end-to-end contract process, instead of using three or four; it will be faster and easier both for you and the customer – and will likely save you money too.
Choose a service that’s structured and searchable
Lots of tools means lots of files – and that means lots of room for error and data loss, and a messy experience for your counterparty. Your SaaS agreement might include a PDF order form alongside Ts and Cs in Word, but these formats keep data differently and discard it as they move between platforms. Version control quickly becomes unmanageable. Instead, choose a contract collaboration platform that works with contracts as dynamic, digital data models, so everything is structured and searchable from day one, and version control isn’t ever a problem again.
Check out the ‘Modern contract handbook’, in which experts explore every stage of the contract lifecycle.
How to simplify your SaaS agreement content
Legal design hasn’t quite gone mainstream, but more and more companies are waking up to the benefits of incorporating design thinking in their agreements. SaaS agreements are ripe for this. While the specifics of terms you’ll include, remove, soften or strength are tough questions for the legal team, here are some quick wins in making your contracts simpler and friendlier to counterparties.
Foreground the key terms. If deal negotiations usually centre on two or three key issues – like commercials, auto-renewals, liability caps, or whatever it might be – there’s no point trying to bury them. People will find them (and why are you trying to hoodwink your new commercial partner anyway?) We’re big fans of Verity White’s reverse sandwich approach to contract design.
Brand it. Incorporating your company’s logo, colours and branding will make the document easier to read and simpler to navigate. You can even bring in visual elements like infographics and animations with the right contracts platform.
Useful features for simplifying SaaS agreements
If you want to simplify your SaaS agreement process, look for the following features:
Internal and external commenting. Keeping things brief should reduce how much your agreement is negotiated, but make sure your contracting platform allows in-browser commenting, so you can provide extra details quickly and transparently.
Bundling and attachments. If your SaaS agreement comprises several documents, find a contract platform that lets you attach or bundle them, so counterparties don’t lose control as the process goes on.
Mass actions. The last thing you want is for your simplified SaaS agreement to get held up waiting for an authorized signatory to work through hundreds of signatures. Find a platform that lets you carry out mass actions.
Dynamic editor. To add features like logos as JPEGs or even GIFs, you’ll need a rich text editor that can handle visual content.
Conditional logic. This will allow you to codify common fallback positions in your contracts, making it easier to change the content according to the demands of the deal.
Mobile-responsive eSigning. You simplified your SaaS agreement to make a quick signature more likely – so make sure you’ve got technology that allows you to sign securely on any device.
If your contract workflow is supercharged with all these features, your simplified SaaS agreements will enable commercial and business teams to achieve a faster time-to-close and – hopefully – happiness on both sides of the contract.
Is simplifying SaaS agreements a pain point for your business? Is your SaaS company or marketplace growing so fast that the contract process is out of control, with friction pre-signature and a lack of visibility post-signature?
If so, try Juro and see if you could benefit from a contract collaboration platform that enables businesses to agree and manage contracts all in one unified workspace.