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Customer  Bill  Of  Rights:  


Software-­‐as-­‐a-­‐Service  
39  Best  Practices  To  Improve  the  SaaS  
Client  -­‐  Vendor  Relationship  

October 12, 2009

By  R  “Ray”  Wang  
With  Jeremiah  Owyang  
 
 
Includes  input  from  57  ecosystem  
contributors  
 

Content Protected Under A Creative Commons Attribution-Share Alike License 3.0


Figures  ©2009  R  Wang  &  Altimeter  Group  LLC.    All  rights  reserved.    Reproduction  by  request.  
 
Published by Altimeter Group, LLC. | 1855 South Grant Street, Suite 100 | San Mateo, CA 94402
www.altimetergroup.com  
2 Customer Bill Of Rights: Software-as-a-Service

Ecosystem  Input -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐3  


Influencer  Input -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐3  
Vendor  Input-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐3  
Customer  Bill  Of  Rights:  Software-­‐As-­‐A-­‐Service-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐4  
Purpose  And  Intent-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐4  
Executive  Summary -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐4  
Cost  Transformation  Drives  Mainstream  SaaS  Adoption-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐4  
SaaS  Licensee’s  Rights  Must  Reflect  Unique  Business  Model  Considerations -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐6  
SAAS  Bill  of  Rights  Span  a  Continuous    Ownership  Lifecycle -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐7  
Section  1:  Ownership  Experience  And  Governance  Models -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 8  
Section  2:  Selection -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 9  
Section  3:  Deployment -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 10  
Section  4:  Adoption -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 10  
Section  5:  Optimization -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 11  
Section  6:  Renewal-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 12  
Customer  Rights  Must  Come  With  Responsibilities -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 13  
Recommendations -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 14  
Put  The  Best  Practices  From  SaaSBoR  To  Use  Across  The  Organization -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 14  
Resources -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 15  
Community-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 15  
About  Altimeter  Group -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 15  
Footnotes -­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐-­‐ 15  

Content Protected Under A Creative Commons Attribution-Share Alike License 3.0


Figures  ©2009  R  Wang  &  Altimeter  Group  LLC.    All  rights  reserved.    Reproduction  by  request.  
 
Published by Altimeter Group, LLC. | 1855 South Grant Street, Suite 100 | San
Mateo, CA 94402
www.altimetergroup.com  
Customer Bill Of Rights: Software-as-a-Service 3

Ecosystem Input
The  Customer  Bill  of  Rights:  Software-­‐as-­‐a-­‐Service  (SaaS)  report  could  not  have  been  produced  
without   the   generous   input   from   some   of   the   leading   market   influencers   and   the   following  
vendors  who  have  shown  a  keen  interest  in  transforming  the  client-­‐vendor  relationship.    Please  
keep  in  mind;  input  into  this  document  does  not  represent  a  complete  endorsement  of  these  
rights  in  total  by  the  individuals  or  vendors  listed  in  this  report.  

Influencer Input
Nenshad  Bardoliwalla   Paul  Greenberg,  The  56  Group  
Naomi  Bloom,  Bloom  and  Wallace   James  Governor,  Red  Monk  
Kevin  Dobbs,  Montclair  Advisors   Erin  Kinikin  
Bob  Evans,  TechWeb   Esteban  Kolsky  
Dennis  Howlett,  Enterprise  Irregulars   Michael  Krigsman,  Asuret  
Phil  Fersht,  Horses  For  Sources   Frank  Scavo,  Computer  Economics  
Christian  Gherorghe   Josh  Weinberger,  CRM  Magazine  

Vendor Input
Agresso     Informatica   Pervasive  Software  
Appiro   Infosys   RightNow  Technologies  
Boomi   Intacct   Rimini  Street  
Blue  Wolf   Intuit   Salesforce.com  
Cisco  Systems   Jive  Software   SAP  
CODA   KickApps   SocialText  
Demand  Media   Lithium   SoftBrands  
Epicor   M-­‐Factor   SuccessFactors  
Everest  Software   Microsoft   Sugar  CRM  
Flexera   Mzinga   Telligent  
GetSatisfaction   NetSuite   Tenrox  
HelpStream   Oracle   Ultimate  Software  
IBM   Panaya  Inc   UserVoice  
Infor   Patni   VMWare  
Workday

Content Protected Under A Creative Commons Attribution-Share Alike License 3.0


Figures  ©2009  R  Wang  &  Altimeter  Group  LLC.    All  rights  reserved.    Reproduction  by  request.  
 
Published by Altimeter Group, LLC. | 1855 South Grant Street, Suite 100 | San
Mateo, CA 94402
www.altimetergroup.com  
4 Customer Bill Of Rights: Software-as-a-Service

Customer Bill Of Rights: Software-As-A-Service

Purpose And Intent


This  document  is  intended  to  serve  as  a  reference,  checklist,  and  point  of  discussion  with  SaaS  
vendors   for   prospects   and   clients   who   have   made   the   decision   to   begin   a   SaaS   deployment.      
Though   your   SaaS   vendor   may   not   provide   all   these   rights   today,   these   represent   the   best  
practices   in   over   250   SaaS   contracts   and   the   general   spirit   and   intent   of   most   SaaS   vendor’s  
executive  management  teams.  

Executive Summary
SaaS  deployments  have  entered  the  heart  of  the  business  and  now  deserve  to  be  treated  with  
all  the  rigor  and  due  diligence  of  on-­‐premise  licensed  software.    Client  –  vendor  relationships  in  
SaaS  are  perpetual  and  it  is  imperative  that  these  agreements  provide  a  chance  for  a  new  slate.    
CIO’s,   CMO’s,   LOB   execs,   procurement   managers,   and   other   organizational   leads   should   ensure  
that  the  mistakes  they  made  in  licensed  software  aren't  blindly  carried  over.    The  SaaS  Bill  of  
Rights   (SaaSBoR)   provides   a   tool   for   clients   and   vendors   to   change   the   tenor   of   contract  
negotiations  from  subservient  user  to  equal  and  collaborative  partnership.  

Cost Transformation Drives Mainstream SaaS Adoption


Organizations  saddled  with  cost  pressures,  rigidity  of  existing  legacy  systems,  flood  of  business  
requests   for   changes,   and   impending   regulatory   and   compliance   burdens,   now   turn   to  
software-­‐as-­‐a-­‐service   (SaaS)   as   a   deployment   option   and   business   model   to   bring   immediate  
value  to  their  organizations.    In  fact  -­‐-­‐  multiple  research  surveys  show  an  estimated  35%  to  45%  
of   companies   considering,   piloting,   and/or   adopting   SaaS   solutions   in   the   organizationi.     In  
emerging   markets,   organizations   have   chosen   SaaS   as   a   way   to   leapfrog   legacy   deployment  
options.  
 
However,   SaaS   should   not   be   seen   as   anything   new   to   the   enterprise.     Many   consumer  
solutions   and   Web   2.0   social   technologies   such   as   SocialText,   LinkedIn,   FaceBook,   Twitter,  
Gmail,   and   YouSendIt   have   already   been   put   to   use   inside   organizations,   often   without   the  
advisement  from  IT  departments.    This  groundswell  of  user  driven  consumer  tech  initiatives  has  
quietly   permeated   and   benefited   many   organizations.   As   the   shift   from   consumer   tech   to  
enterprise  class  SaaS  solutions  continues,  organizations  should  consider  seven  key  benefits  of  
moving  to  SaaS  over  on-­‐premise  (see  Figure  1):  
 
 
 
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Customer Bill Of Rights: Software-as-a-Service 5

 
Figure  1.  SaaS  Deployment  Delivers  7  Key  Benefits  
 

 
 
Source:  Altimeter  Group  September  2009  SaaS  Benefits  Survey  of  91  end  user  clients  and  vendors.  
 
 

1. Richer  user  experience  and  user  productivity.    Newer  technologies  enable  more  engaging  and  
easy-­‐to-­‐use  interfaces.    Solutions  often  designed  with  a  role  based  perspective  in  mind  result  in  
minimal  training.ii  
2. Rapid   IT   implementation   and   optional   higher   quality   deployment.     The   duration   of   the  
technical  implementation  phase  moves  from  months  to  weeks.    Customers  can  demo  a  product,  
move   to   sandbox,   and   train   in   days.     Organizations   now   have   the   option   to   redirect   their  
budgets   and   resources   to   improve   business   process   and   configuration   instead   of   fighting  
integration   and   deployment   quagmires.     True   SaaS   solutions   do   not   require   individual   installs,  
instead  they  leverage  the  SaaS  environment.      
3. More   frequent   cycles   of   innovation.   SaaS   vendors   update   their   solution   between   2   to   4   times   a  
year.     With   current   Agile   development   methodologies,   some   vendors   iterate   in   months.    
Customers  gain  access  to  latest  features,  bug  fixes,  and  regulatory  updates  at  a  quicker  pace.    In  
many   cases,   organizations   turn   to   SaaS   to   access   innovation   and   capabilities   not   provided   by  
incumbent  on-­‐premise  vendors.  
4. Minimal  upgrade  hassles.    Users  no  longer  have  to  worry  about  a  flurry  of  bug  patches,  fixes,  
and   the   endless   testing   cycles   required   to   validate   changes.   Business   processes   impacted   by  
regulatory   changes   such   as   financial   closing   and   hire   to   retire   benefit   the   most   from   easier  
consumption  of  updates.  
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6 Customer Bill Of Rights: Software-as-a-Service

5. Access   to   the   “always-­‐on”   SaaS   tools   regardless   of   location.     Office   workers   can   now   access  
these  SaaS  tools  anywhere  they  go.    These  consumer  tools  often  have  rich  mobile  experiences  –
often  far  ahead  than  providers  in  the  on-­‐premise  space.  
 
6. Subscription   pricing.   SaaS   solutions   have   adopted   subscription   or   utility   pricing   to   spread   out  
payments   over   time.     The   shift   from   capital   expenditure   (CapEx)   to   operational   expenditure  
(OpEx)   frees   up   funds   for   other   projects.   Business   users   can   swipe   and   buy   without   going  
through   complicated   procurement   processes.     During   recessionary   times,   subscribers   only   buy  
what   they   consume,   stretching   their   investment.     Many   contract   terms   have   also   moved   from  
yearly  to  monthly  increments.  
7. Anytime   scalability   and   dynamic   capacity.     Scalability   enables   customers   to   streamline   cost   per  
additional   user.     Clients   can   flex-­‐up   or   flex-­‐down   on   usage   without   incurring   spikes   in   variable  
costs  such  as  hardware,  staffing  resources,  and  license  costs.      

SaaS Licensee’s Rights Must Reflect Unique Business


Model Considerations
With   increased   SaaS   adoption,   organizations   must   consider   broader   implications   and  
expectations   of   the   SaaS   client-­‐vendor   relationship.     Building   long-­‐term   win-­‐win   relationships  
with  SaaS  vendors  differs  from  the  on-­‐premise  world  for  a  three  key  reasons:  
 
• Issues  related  to  software  license  rights.    In  true  multi-­‐tenancy,  SaaS  vendors  own  the  core  
code  and  licensees  own  the  data  and  metadata.    Clients  must  assess  exit  strategies.    What  
happens  if  the  vendor  goes  out  of  business?    What’s  happens  when  the  vendor  is  acquired  by  a  
competitor?  What  do  you  do  to  make  the  data  useful  without  context?    How  do  you  prevent  
lock-­‐in?    Can  you  buy  the  data  models  and  logical  models?  
• Vendor  commitment  to  significant  product  investment.    Pace  of  innovation  remains  rapid  
today  but  there  are  no  guarantees  on  what  to  expect  in  future  levels  of  investment.    With  
frequency  ranges  from  2  to  4  times  a  year,  what  protections  do  clients  have  for  future  
investment  levels?    Will  vendors  attempt  to  charge  for  “new”  modules  that  represent  
extensions  of  existing  capability?    How  does  the  buyer  provide  input  into  future  product  
roadmaps?  
• Client  remedies  for  breaches  in  service  level  agreements.    Despite  all  backups  and  contingency  
plans,  clients  should  consider  scenarios  where  core  business  systems  may  go  down.    What  are  
fair  remedies?    How  are  systems  backed-­‐up?    What  will  be  done  during  disaster  recovery?    How  
much  liability  the  vendor  will  provide?  

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Customer Bill Of Rights: Software-as-a-Service 7

SAAS Bill of Rights Span a Continuous


Ownership Lifecycle
SaaS  shifts  ownership  from  perpetual  licenses  to  perpetual  usage.  In  fairness,  vendors  should  
expect  a  minimum  standard  of  respectful,  sincere,  and  earnest  clients.    Users  must  consider  the  
implications  of  perpetual  usage  and  relationship.    These  SaaS  Bill  of  Rights  represent  a  client-­‐
focused  perspective  of  what  vendors  should  provide  as  37  basic  rights.  Five  key  phases  across  
the  SaaS  ownership  life  cycle  include  (see  Figure  2):  
 
Figure  2.    SaaS  Ownership  Experience  Spans  A  Five-­‐Phased  Lifecycle  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Source:  Altimeter  Group    

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8 Customer Bill Of Rights: Software-as-a-Service

Section  1:  Ownership  Experience  And  Governance  Models  


The   SaaS   ownership   experience   parallels   similar   elements   of   outsourcing.     To   start,  
organizations   hand   control   over   business   processes   to   a   third   party   solution/service   provider.    
Hence,   clients   should   take   the   time   to   design   the   appropriate   levels   of   governance   to   achieve   a  
mutually   beneficial   ownership   experience.     Client   rights   that   emphasize   the   client-­‐vendor  
relationship  include:  
 
• Vendor  executive  advocacy  and  accountability.    In  the  consumer  space,  this  may  result  in  
management  team  accountability  for  customer  success.    At  higher  price  points,  organizations  
can  expect  to  know  which  executives  take  responsibility  for  customer  satisfaction  and  advocacy.    
Escalation  processes  should  be  defined  upfront.    Product  and  sales  accountability  should  be  tied  
to  specific  individuals  and  customer  satisfaction  should  be  tied  to  compensation  metrics.  
• Timely  and  meaningful  interactions.    Vendors  and  their  partners  should  guarantee  timely  
response  times  for  key  issues  such  as  service  requests,  bug  fixes,  and  help  desk  issues.    Key  
policy  changes  such  as  product  road  map  decisions,  organizational  and  personnel  moves,  
support  policies,  and  licensing  and  pricing  should  be  communicated  in  a  timely  fashion  to  
customers  and  tracked  by  the  vendor.    Vendors  should  provide  a  complete  picture  of  the  overall  
interaction  history.  
• Professional  customer  relations.    Courtesy  and  respect  across  all  customer  touch  points  should  
be  the  norm  from  not  only  front  line  customer  facing  personnel,  but  also  back  office  employees.    
Vendors  should  keep  all  contract  details  confidential  and  private  unless  permission  has  been  
granted.    Professionalism  also  includes  the  right  to  work  with  knowledgeable  and  trained  
resources.  
• Quality  guarantees  and  remuneration.    Customers  should  expect  that  vendors  to  stand  behind  
the  quality  of  both  their  products  and  services.    This  includes  full  disclosure  of  known  and  
potential  defects  that  relate  to  performance,  availability,  bugs,  integration,  and  partner  solution  
compatibility.    Penalties  for  breaches  should  reflect  the  business  impact  of  a  disruption  or  
inability  to  access  a  capability  promised  to  a  customer.    Customers  should  be  able  to  choose  the  
format  of  remuneration.    Vendors  should  be  able  to  place  mutually  agreed  limits  on  liability.  
• Ownership  of  and  access  to  data  with  no  questions  asked.    Customers  should  know  that  they  
own  all  their  data  and  have  access  to  this  data  at  all  times  throughout  the  relationship.    Tools  to  
access  data  should  be  provided  to  clients.    Vendors  should  build  from  this  customer  centric  
design  point.    
• Ongoing  Transparency.    For  critical  applications,  clients  should  be  given  insight  into  the  vendor’s  
long-­‐term  viability  (i.e.  financing,  operational  condition,  etc.),  regardless  of  whether  the  vendor  
is  publicly  or  privately-­‐owned.  Transparency  rights  include  access  on  a  periodic  basis  to  the  
vendor’s  financial  statements  along  with  insight  into  the  vendor’s  operational  performance  in  
areas  such  as  incident  and  problem  management,  security  management,  and  business  
continuity  planning.  Transparency  allows  customers  to  develop  risk  management  scenarios  
based  on  the  vendor’s  actual  financial  and  operational  condition,  giving  customers  the  necessary  
time  to  migrate  to  a  new  service  provider  if  appropriate.  
 
 
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Customer Bill Of Rights: Software-as-a-Service 9

Section  2:  Selection  


Selection   describes   the   rights   prospects   and   clients   should   expect   from   software   vendors   as  
they  make  their  decision  on  a  product  and  vendor.    Prospects  and  clients  should  have  a  right  to:  
 
• Include  an  entire  agreement  clause.    Prospects  and  clients  should  ensure  that  demos,  
proposals,  and  promises  made  during  the  selection  process  are  included  in  the  final  contract.    
Vendors  should  expect  clients  to  include  documentation  as  exhibits  in  contracts.  
• Try  before  buying.    Prospects  and  clients  should  be  given  access  to  the  system  and  provided  a  
sandbox  to  demonstrate  the  system.    Vendors  should  retain  the  right  to  charge  for  the  proof  of  
concept  as  appropriate.  
• Access  licensing  and  pricing  terms  and  conditions.    Pricing  metrics,  discounting  criteria,  and  
terms  and  conditions  should  be  provided  upfront  to  all  customers.    Prospects  should  receive  
updates  and  alerts  when  changes  are  made.    Terms  around  user  and  usage  metrics  should  be  
made  clear.    Standard  contracts  and  renewal  provisions  should  be  made  available  for  review.  
• Provide  a  TCO  analysis  of  SaaS  during  the  sales  cycle.    Vendors  should  be  able  to  show  the  true  
cost  of  ownership  over  a  defined  period  of  time.    Key  metrics  should  show  comparisons  of  
deployment  options  over  5,  7,  and  10-­‐year  time  frames.    
• Obtain  clear  policies  on  storage  costs.    SaaS  clients  often  find  out  after-­‐the-­‐fact  that  the  storage  
allocations  do  not  meet  actual  usage  requirements.    Once  hooked  onto  the  product,  on-­‐going  
storage  costs  could  prove  to  be  the  largest  expense  item.    Clients  should  negotiate  these  terms  
in  advance  and  seek  pricing  plans  from  vendors.  
• Receive  disclosure  about  solution  defects.    Customers  and  prospects  should  be  given  access  to  
a  list  of  known  bugs,  integration,  performance,  and  deficiencies.    This  should  include  incomplete  
business  process  flows  or  scenarios  where  use  case  scenarios  cannot  be  completed.  
• Understand  system  configuration  and  architecture.    Clients  should  receive  details  about  the  
hardware  architecture.    Key  areas  to  detail  include  hardware,  processing  approach,  operating  
system,  and  configuration  and  customization  process.    Other  areas  for  disclosure  include  
processing  pipelines,  batch  processing,  queuing,  and  system  monitoring  methodologies.  
• Stipulate  data  management  requirements.    Clients  should  determine  data  properties  including  
physical  location,  security  mechanisms,  access  rights,  disaster  issues,  and  regulatory  compliance.    
Critical  information  such  as  host  info  and  availability  should  be  provided.    Location  of  the  cloud  
may  play  a  role  in  selection.  
• Reach  out  to  customer  and  partner  references.    Clients  should  expect  a  vendor  to  provide  
customer  references  for  unfettered  conversations  about  the  solution.    Clients  should  also  be  
able  to  reach  out  to  user  group  leaders  for  honest  and  candid  discussions.  
• Perform  due  diligence  on  a  vendor.    Prospects  should  be  able  to  examine  a  SaaS  vendor’s  
financial  viability,  security  risks,  and  legal  liability.    Key  areas  should  include  financial  
performance,  legal  risks,  management  team  background,  customer  lists,  and  SAS  70  compliance.    
Clients  should  have  the  right  to  review  SAS  70  certification  results;  and  conduct  or  have  third  
party  auditors  perform  regular  audits  of  the  vendor  data  center.      

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10 Customer Bill Of Rights: Software-as-a-Service

• Contract  third  party  advice.    Clients  should  retain  the  right  to  engage  a  third  party  advisor  in  
vendor  selection,  contract  negotiations,  and  independent  verification  and  validation  (IV&V).    
Vendors  should  not  try  to  prevent  clients  from  seeking  such  advice.  
 

Section  3:  Deployment  


Deployment   describes   the   rights   clients   should   expect   from   software   vendors   as   they  
implement  and  consume  the  technology.    Rights  should  include:  
 
• Support  multiple  implementation  options.    Clients  should  be  given  a  choice  as  to  whether  they  
can  self-­‐deploy,  choose  a  trained  third  party  partner,  or  work  with  the  vendor.  Selected  partners  
should  be  able  to  obtain  access  to  key  data  and  implementation  information.    In  cases  where  no  
partner  exists,  clients  should  have  the  option  to  self-­‐implement  with  vendor/partner  assistance.  
• Receiving  a  clear  statement  of  work  and  project  status  reporting.    Vendors  should  deliver  large  
projects  in  accordance  with  project  management  best  practices  such  as  the  Project  
Management  Body  of  Knowledge  (PMBOK).  Smaller  projects  should  follow  clearly  defined  
templates  for  rapid  implementation.    Deliverables,  milestones,  acceptance  criteria,  and  
escalation  processes  should  be  documented  prior  to  project  kick-­‐off.    The  implementation  
teams  should  provide  service  level  agreements  (SLAs).        
• Contracting  vendor  expertise.    Customers  should  have  the  right  to  engage  vendor  experts  such  
as  product  development  teams,  solution  architects,  training,  and  support  personnel  at  
reasonable  rates.    Assess  the  team  on  their  technical  acumen.    Examine  how  consultants  are  
trained,  how  product  teams  and  consultants  collaborate,  and  how  they  address  challenging  
projects.    Fees  should  be  provided  in  advance.    Detailed  information  should  include  personnel  
rates  and  estimated  effort  for  common  projects.  
• Accessing  training  programs.  Vendor  should  provide  access  to  training  programs  to  ensure  a  
client  or  their  partner  could  complete  a  deployment.    More  importantly,  clients  should  expect  
adequate  knowledge  transfer  activities  from  the  vendor  to  ensure  self-­‐sufficiency.  

Section  4:  Adoption    


Adoption   describes   the   rights   clients   should   expect   from   software   vendors   as   they   utilize   the  
solution  across  the  organization.    Vendors  should  provide  clients  with  the  following  rights:  
 
• Freedom  of  speech.    Clients  should  not  be  limited  in  discussing  the  solution  with  fellow  
customers,  peers,  or  media.    Clients  should  be  able  to  freely  discuss  issues  with  the  software  
including  but  not  limited  to  security  issues,  bugs,  and  pricing.    Clients  should  not  be  limited  to  no  
disparagement  clauses.    Both  sides  should  be  open  in  their  communication.  
• License  equivalency.    Clients  of  on-­‐premise  software  vendors  moving  to  SaaS  and  other  on-­‐
demand  models  should  be  given  the  right  to  convert  user  and  usage  models  across  different  
deployment  options.    Equivalency  ratios  should  be  determined  ahead  of  time.    
• Intellectual  property  (IP)  indemnification.    Vendors  faced  with  lawsuits  will  provide  clients  with  
indemnification  from  IP  legal  claims.    Remedies  should  include  refund  of  the  subscription  costs,  
provision  of  a  replacement  solution  at  zero  cost,  and  vendor  developed  solution.  

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Customer Bill Of Rights: Software-as-a-Service 11

• Software  escrows.    Clients  should  expect  vendors  to  provide  the  option  to  access  a  competitive  
provider  of  their  choice  who  serve  as  custodians  for  source  code,  user  data,  application  
executables,  and  related  documentation.    Mutual  agreement  should  be  determined  on  
frequency  of  backups  and  updates.    Hot  backups  should  be  made  available  for  disaster  recovery  
scenarios.    Vendors  reserve  the  right  to  charge  for  software  escrows.  
• Integration  and  API  support.    As  organizations  make  the  shift  from  on-­‐premise  to  cloud-­‐based  
deployment  options,  vendors  must  deliver  key  access  to  public  API’s,  web  services,  and  other  
integration  tools  to  support  hybrid  deployment.    In  some  cases,  integration  will  revolve  around  
business  processes  such  as  order  to  cash,  campaign  to  lead,  and  incident  to  resolution.  
• Data  quality  support.    While  a  vendor  cannot  guarantee  the  quality  of  data  being  put  into  the  
system,  tools  should  be  provided  to  address  both  a  sourcing  and  day-­‐to-­‐day  processing  
perspective.    These  tools  ensure  short-­‐term  and  long  term  efficient  processing.  

Section  5:  Optimization  


Usage   optimization   describes   the   rights   customers   should   expect   from   software   vendors   as  
they  change  how  they  expand,  maintain,  or  contract  in  their  usage  of  the  solution.    Customers  
should  expect:  

• Price  protection  options.    Clients  and  prospects  should  be  given  the  opportunity  to  lock-­‐in  
increased  consumption  guarantees  or  seek  price  increase  protection.    Vendors  should  provide  
the  discount  rationale  and  clearly  state  the  pricing  bands  for  each  bulk  increment.    Clients  
should  be  able  to  move  between  bands  at  defined  periods  of  time.    One  option  –  provide  for  a  
collar  where  user  counts  can  fluctuate  up  or  down  by  25%  over  six  months  or  a  year  at  the  same  
unit  price.    Vendors  should  be  able  to  set  minimums.  
• Affiliate  usage  assignment.    Customers  should  be  able  to  provide  access  and  usage  of  the  
software  to  majority  owned  affiliates.    Customers  and  vendors  should  determine  how  to  treat  
usage  assignment  with  other  related  organizations.  
• M&A  scenarios.    Clients  should  be  given  the  option  to  combine  contracts  to  achieve  higher  
discount  levels  or  tiers  during  mergers  and  acquisitions.    In  cases  where  the  software  will  no  
longer  be  use,  limited  access  licenses  should  be  provided  to  access  pre-­‐merger  files,  compliance  
requirements,  or  historical  trending  data.    SaaS  vendors  should  provide  an  option  for  clients  to  
flex-­‐down  usage  or  terminate  during  divestitures.    Vendors  may  also  provide  an  option  to  apply  
credits  to  the  new  entity.  
• Multiple  support  options.    Customers  should  be  given  more  than  one-­‐size  fits  all  support  
options.    Options  should  provide  tiering  in  pricing  and  service  levels  that  correspond  to  actual  
usage.  
• Install  base  transparency.    Vendors  should  inform  customers  when  multiple  installations  have  
been  deployed  at  a  company.      Clients  should  be  able  to  access  information  about  usage  by  
users  to  determine  if  they’ve  purchased  shelf  ware.  
• On-­‐going  performance  metrics.    Clients  should  expect  a  trust  site  to  monitor  service  level  
agreements.      Vendors  should  provide  at  least  a  monthly  report  on  key  availability  and  
continuity  metrics.  
 

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12 Customer Bill Of Rights: Software-as-a-Service

Section  6:  Renewal  


Revision   describes   the   rights   clients   should   expect   from   software   vendors   as   they   shift   their  
usage  requirements  and  change  how  they  adopt  SaaS  solutions.    At  a  minimum,  clients  should  
expect  rights  to:  
 
• Provide  input  into  future  capabilities.    Vendors  should  provide  input  mechanism  for  
requirements  prioritization.    Prioritization  and  acceptance  criteria  for  roadmap  decisions  should  
be  made  open  to  clients.    Clients  should  understand  that  vendors  might  reserve  a  portion  of  
investment  decisions  for  platform  upgrades  and  updates.    Vendors  should  provide  confirmation  
and  status  on  feature  requests.    
• Give  ample  notice  before  deployment.    Vendors  should  give  customers  ample  time  (e.g.  30,  60,  
and  90  days)  to  prepare  for  an  upgrade.    This  includes  keeping  the  lines  of  communication  open,  
preparing  the  appropriate  training  materials,  providing  guidance  on  testing,  and  working  with  
end  users  on  implementation  risks  and  impacts.  
• Transition  to  alternative  deployment  options.    Vendors  with  multiple  deployment  options  for  
similar  code  lines  should  provide  mechanisms  for  clients  to  transition  among  the  different  
options.    At  no  time  should  a  client  be  locked  in  to  one  deployment  option.    Pricing  options  
should  reflect  a  comparable  total  account  value.    Client  should  be  able  to  access  full  data  at  any  
given  time,  no  questions  asked.  Vendors  should  provide  both  public  and  private  access  to  APIs  
to  support  transitions.  
• Determine  termination  criteria.      Both  clients  and  software  vendor  should  communicate  clear  
termination  criteria.    Termination  criteria  should  also  include  transition  language  and  migration  
assistance  conditions  for  impacted  clients.    Regardless  of  the  contract,  the  customer  should  
always  own  their  data  and  have  the  opportunity  to  migrate  it.    Acquisition  should  be  listed  as  
one  example  of  acceptable  termination  criteria.  
• Receive  migration  assistance.    Customers  leaving  a  SaaS  provider  should  be  provided  with  the  
necessary  transition  tools  to  ensure  business  continuity.    Tools  could  include  temporary  hosting  
privileges,  integration  frameworks,  data  migration,  and  historical  archive  capabilities.  These  
costs  should  be  determined  during  the  selection  process.  
• Purchase  the  source  code.    In  some  cases,  clients  may  leave  a  SaaS  vendor  and  require  more  
than  just  the  flat  file  extract  of  their  data.    Some  vendors  in  the  past  have  allowed  clients  to  
purchase  the  semantics  of  the  data.    Key  items  would  include  business  rules  that  govern  the  
data  structures  within  which  the  data  is  stored,  data  models,  and  logical  models.  
 

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Customer Bill Of Rights: Software-as-a-Service 13

Customer Rights Must Come With Responsibilities


SaaS   provides   an   opportunity   for   clients   and   vendors   to   rethink   their   relationships.     Vendors  
give  up  some  of  the  mystique  of  software  contract  negotiations  with  an  open  Customer  Bill  of  
Rights.     An   open   and   collaborative   approach   will   lead   to   a   more   amiable   and   long-­‐term  
approach   to   the   client-­‐vendor   relationship.     However,   clients   must   take   actions   and  
responsibility  to  keep  their  rights  by:  

• Ensuring  adequate  client  side  resources  to  succeed  in  deployment.    Clients  must  bring  to  the  
table  executive  sponsorship,  adequate  funding,  appropriate  resourcing,  and  strong  project  
management.    In  cases  where  clients  decide  to  self-­‐implement,  they  should  have  the  vendor  or  
third  party  assess  their  capabilities  to  collaborate  towards  a  successful  implementation.  
• Paying  invoices  on  time  and  in  full.    SaaS  vendors  deliver  solutions  24/7.    As  with  utilities,  they  
will  not  immediately  turn  off  service  for  late  payment.    However,  clients  should  pay  invoices  on  
time  if  they  expect  their  SaaS  vendors  to  keep  the  lights  on  and  stay  in  business.  
• Partnering  with  their  vendors  to  ensure  their  long-­‐term  viability.    Clients  can  add  complexity  
and  cost  into  the  cycle  when  they  try  to  prove  how  smart  they  are  during  contract  negotiation.    
Excessive  use  of  large  penalties,  price  caps,  and  other  "you  can't  fool  me"  items  often  create  an  
adversarial  relationship  right  from  day  one.    Clients  should  hold  to  their  rights  and  objectives  but  
keep  in  mind  the  potential  long-­‐term  nature  of  SaaS  relationships.  
• Maintaining  ongoing  communication.    Clients  often  expect  SaaS  vendors  to  respond  
immediately  to  requests.    Clients  should  also  respond  to  SaaS  vendors  in  a  timely  manner.    If  an  
issue  is  addressed,  clients  should  communicate  whether  or  not  the  solution  succeeded  or  failed.    
Clients  should  anoint  a  dedicated  resource  to  maintain  this  level  of  dialogue  with  the  vendor.  
• Acknowledging  changes  in  scope.    Customers  need  to  accept  responsibility  for  major  changes  in  
scope  that  differ  from  an  initial  product  and  implementation  plan.    Clients  should  review  
changes  and  compensate  vendors  for  changes  that  materially  impact  delivery  dates,  resource  
allocation,  and  overall  cost.  
• Serving  as  a  client  reference.    Clients  should  be  open  to  share  honest  feedback  with  prospects  
and  other  clients  about  their  experiences  with  the  solution  and  the  vendor.    Where  possible,  
clients  should  engage  in  the  ecosystem  by  taking  a  reasonable  number  of  press  calls,  prospect  
calls,  and  speaking  opportunities.      Vendors  should  not  abuse  this  privilege.  
• Providing  feedback  into  product  roadmaps.    When  given  the  opportunity,  clients  should  take  
the  time  to  provide  input  into  the  future  direction  of  products,  markets,  and  other  investments.    
Clients  should  help  shape  the  direction  of  how  that  feedback  is  defined  and  provide  input  on  the  
success  or  failure  of  that  solution.    

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14 Customer Bill Of Rights: Software-as-a-Service

Recommendations
Put The Best Practices From SaaSBoR To Use Across The
Organization
While  SaaS  may  appear  to  be  a  short-­‐term  fix  to  the  lack  of  timely  innovation  and  ownership  
expense  structure  brought  on  by  many  on-­‐premise  vendors,  organizations  should  view  this  as  
key  pillar  in  their  overall  enterprise  strategy.    The  proliferation  of  SaaS  deployments  will  require  
CIO’s,  business  leaders,  and  sourcing  and  vendor  management  teams  to  work  more  closely  with  
each  other  to  deliver  flexible  guidelines  in  the  adoption  of  SaaS  solutions.    Consequently,  the  
Altimeter  Group  suggests  the  following:  

• Use  the  SaaS  Bill  of  Rights  to  bring  IT  and  business  teams  together.    Walk  through  the  best  
practices  to  establish  future  SaaS  procurement  policies.    CIO’s  can  give  use  the  SaaS  Bill  of  
Rights  to  establish  frameworks  for  business  units  to  speed  up  the  vendor  selection  process.    
• Include  the  SaaS  Bill  of  Rights  in  SaaS  evaluation  and  selection  criteria.      Utilize  the  rights  
as  a  starting  point  in  establishing  a  long  term,  productive  client  –vendor  relationship.    The  
SaaS  Bill  of  Rights  should  be  a  starting  point  for  discussions.    Clients  should  also  keep  in  
mind  their  responsibilities  as  a  client  in  the  relationship  
• Expand  the  rights  to  meet  organizational  requirements.      The  SaaS  Bill  of  Rights  provides  a  
starting  point  for  your  contract  negotiations  and  establishment  of  a  long-­‐term  client-­‐vendor  
relationship.    Organizations  should  expand  on  rights  that  apply  to  specific  industries,  
geographies,  and  regulatory  conditions.  
• Join  the  SaaS  Bill  of  Rights  ecosystem.    Altimeter  Group  has  put  together  a  series  of  
community  tools  including  a  linked  in  group  to  continue  the  discussion.    New  rights,  your  
experiences,  and  feedback  can  be  contributed  on  the  SaaS  User’s  Bill  of  Rights.  

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Customer Bill Of Rights: Software-as-a-Service 15

Resources
Community
Join  the  Customer  Bill  of  Rights  ecosystem.    Altimeter  Group  will  be  continuing  the  discussion  
via  webinars,  social  conversations,  and  events.  
 
LinkedIn:  http://www.linkedin.com/groups?home=&gid=2322509&trk=anet_ug_hm  
http://bit.ly/ctuGL  
 
Twitter  Hashtags  
#SaaSBoR  
http://twitter.com/#search?q=SaaSBoR  
 
About Altimeter Group
Altimeter   Group   is   a   strategy   consulting   firm   that   provide   a   pragmatic   approach   to   emerging  
technologies   to   companies.     We   have   four   areas   of   focus:   leadership   and   management,  
customer  strategy,  enterprise  strategy,  and  innovation  and  practice  
 
Footnotes
                                                                                                           
i   Saugatuck   Technology,   Gartner   Group,   IDC,   and   Forrester   have   shown   similar   SaaS   adoption   rates   in   2009   research  
reports  and  surveys.  
ii  Ten  elements  drive  the  move  to  more  social  enterprise  apps.  Many  SaaS  vendors  already  exhibit  these  qualities.    View  
the   August   24th,   2009   blog   post   “Monday’s   Musings:   10   Essential   Elements   For   Social   Enterprise   Apps”  
http://bit.ly/130WiO  
 

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Figures  ©2009  R  Wang  &  Altimeter  Group  LLC.    All  rights  reserved.    Reproduction  by  request.  
 
Published by Altimeter Group, LLC. | 1855 South Grant Street, Suite 100 | San
Mateo, CA 94402
www.altimetergroup.com