Let’s talk about a hybrid model that’s in-between the traditional on-prem software (installed on the customer-managed environment ) and the #SaaS model (customer accesses the software from a supplier-managed cloud environment).
In the hybrid model, the supplier licenses the software to the customer like the on-prem model. The supplier also hosts the software in a cloud environment that it manages. Practically, the end-result is your typical SaaS application – the customer is accessing software in the cloud managed by the supplier. But theoretically, it isn’t – the supplier is licensing software to the customer, and it also happens to be providing additional hosting services.
Now you have all the concerns of a SaaS application that you have to fit into a traditional licensing contract with an add-on for hosting services.
Some issues to be on the lookout for:
– Does the license allow remote access rights?
– Do the software warranties and associated remedies align with the solution as a whole?
– How are the fees structured? Do refund remedies based on the fee structure adequately protect the customer?
– If the supplier no longer provides hosting, is there an ability to move the application in-house? Does escrow make sense?
Any other issues you should consider?