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

       37 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




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

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




                                                                               © 2010 Altimeter Group

                                                                                                        	
  
	
  
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Table of Contents

Purpose and Intent .............................................................................................................3

Executive Summary ............................................................................................................3

Cost Transformation Drives Mainstream SaaS Adoption ...............................................4

SaaS Licensee’s Rights Must Reflect Unique Business Model Considerations...........2	
  

SAAS Bill of Rights Span a Continuous Ownership Lifecycle ........................................3	
  

       Section 1: Ownership Experience And Governance Models .........................................................4

       Section 2: Selection .......................................................................................................................5

       Section 3: Deployment...................................................................................................................6

       Section 4: Adoption .......................................................................................................................6

       Section 5: Optimization..................................................................................................................7

       Section 6: Renewal ........................................................................................................................8


Customer Rights Must Come With Responsibilities .......................................................9	
  

Recommendations............................................................................................................10	
  

Put The Best Practices From SaaSBoR To Use Across The Organization .....................................10


Resources..........................................................................................................................10

Contact Us.........................................................................................................................11	
  




                                                                                                                            © 2010 Altimeter Group

                                                                                                                            	
  
	
  
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       Customer Bill Of Rights:
       Software-as-a-Service
       37 Best Practices To Improve the SaaS
       Client-Vendor Relationship
       October 12, 2009




       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.




                                                                                        © 2010 Altimeter Group

                                                                                        	
  
	
  
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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 organization1. 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):

Figure 1. SaaS Deployment Delivers 7 Key Benefits


                                                                                                                                                                                       Richer user experience and user productivity


                                                                                                          Rapid IT implementation and optional higher quality deployment 


                                                                                                                                                                                                                               More frequent cycles of innovation


                                                                                                                                                                                                                                   Minimal upgrade hassles 


                                                                                                                          Access to the “always-on” SaaS tools regardless of location 


                                                                                                                                                                                                                                      Subscription pricing 


                                                                                                                                                                                                     Anytime scalability and dynamic capacity 


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




	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
1
 Saugatuck Technology, Gartner Group, IDC, and Forrester have shown similar SaaS adoption rates in 2009 research
reports and surveys.

                                                                                                                                                                                                                                                                     © 2010 Altimeter Group

                                                                                                                                                                                                                                                                     	
  
	
  
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                           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.2

                           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.

                           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:



	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
2
 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

                                                                                                                                                                                                                                   © 2010 Altimeter Group

                                                                                                                                                                                                                                   	
  
	
  
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          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?




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


                                                                                      © 2010 Altimeter Group

                                                                                      	
  
	
  
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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.



                                                                                      © 2010 Altimeter Group

                                                                                      	
  
	
  
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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


                                                                                      © 2010 Altimeter Group

                                                                                      	
  
	
  
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           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.

          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.


                                                                                       © 2010 Altimeter Group

                                                                                       	
  
	
  
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          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.

          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.

                                                                                      © 2010 Altimeter Group

                                                                                      	
  
	
  
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          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.

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.




                                                                                       © 2010 Altimeter Group

                                                                                       	
  
	
  
9	
  


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.




                                                                                       © 2010 Altimeter Group

                                                                                       	
  
	
  
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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.




Resources
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




                                                                                         © 2010 Altimeter Group

                                                                                         	
  
	
  
11	
  


	
  


 Contact Us
 Altimeter’s Hangar (At the Crossroads)
 1875 S. Grant St. #640
 San Mateo, CA 94402-2667
 info@altimetergroup.com
 www.altimetergroup.com

 Consulting Inquiries

 David Stanley
 VP, Business Development and Sales
 Phone: 719.357.7826
 Email: david@altimetergroup.com

 Speaking Inquiries
 	
  
 Mel Blake
 Monitor Talent
 Phone: 617.252.2472
 Email: mel_blake@monitor.com



 About Altimeter Group
 Altimeter Group is a strategy consulting firm that provides companies with a
 pragmatic approach to disruptive technologies. We have four areas of focus:
 Leadership and Management, Customer Strategy, Enterprise Strategy, and
 Innovation and Design.




                                                                                © 2010 Altimeter Group

                                                                                	
  
	
  

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Customer Bill Of Rights: SaaS

  • 1.             Customer Bill Of Rights: Software-as-a-Service   37 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  
  • 2. 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 Naomi Bloom, Bloom and Wallace Kevin Dobbs, Montclair Advisors Bob Evans, TechWeb Dennis Howlett, Enterprise Irregulars Phil Fersht, Horses For Sources Christian Gherorghe Paul Greenberg, The 56 Group James Governor, Red Monk Erin Kinikin Esteban Kolsky Michael Krigsman, Asuret Frank Scavo, Computer Economics Josh Weinberger, CRM Magazine Vendor Input Agresso Infosys Rimini Street Appiro Intacct Salesforce.com Boomi Intuit SAP Blue Wolf Jive Software SocialText Cisco Systems KickApps SoftBrands CODA Lithium SuccessFactors Demand Media M-Factor Sugar CRM Epicor Microsoft Telligent Everest Software Mzinga Tenrox Flexera NetSuite Ultimate Software GetSatisfaction Oracle UserVoice HelpStream Panaya Inc VMWare IBM Patni Workday Infor Pervasive Software Informatica RightNow Technologies © 2010 Altimeter Group    
  • 3. 2   Table of Contents Purpose and Intent .............................................................................................................3 Executive Summary ............................................................................................................3 Cost Transformation Drives Mainstream SaaS Adoption ...............................................4 SaaS Licensee’s Rights Must Reflect Unique Business Model Considerations...........2   SAAS Bill of Rights Span a Continuous Ownership Lifecycle ........................................3   Section 1: Ownership Experience And Governance Models .........................................................4 Section 2: Selection .......................................................................................................................5 Section 3: Deployment...................................................................................................................6 Section 4: Adoption .......................................................................................................................6 Section 5: Optimization..................................................................................................................7 Section 6: Renewal ........................................................................................................................8 Customer Rights Must Come With Responsibilities .......................................................9   Recommendations............................................................................................................10   Put The Best Practices From SaaSBoR To Use Across The Organization .....................................10 Resources..........................................................................................................................10 Contact Us.........................................................................................................................11   © 2010 Altimeter Group    
  • 4. 3   Customer Bill Of Rights: Software-as-a-Service 37 Best Practices To Improve the SaaS Client-Vendor Relationship October 12, 2009 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. © 2010 Altimeter Group    
  • 5. 4   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 organization1. 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): Figure 1. SaaS Deployment Delivers 7 Key Benefits Richer user experience and user productivity Rapid IT implementation and optional higher quality deployment More frequent cycles of innovation Minimal upgrade hassles Access to the “always-on” SaaS tools regardless of location Subscription pricing Anytime scalability and dynamic capacity Source: Altimeter Group September 2009 SaaS Benefits Survey of 91 end user clients and vendors.                                                                                                                 1 Saugatuck Technology, Gartner Group, IDC, and Forrester have shown similar SaaS adoption rates in 2009 research reports and surveys. © 2010 Altimeter Group    
  • 6. 2   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.2 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. 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:                                                                                                                 2 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 © 2010 Altimeter Group    
  • 7. 3    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? 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 © 2010 Altimeter Group    
  • 8. 4   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. © 2010 Altimeter Group    
  • 9. 5   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 © 2010 Altimeter Group    
  • 10. 6   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.  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. © 2010 Altimeter Group    
  • 11. 7    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.  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. © 2010 Altimeter Group    
  • 12. 8    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. 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. © 2010 Altimeter Group    
  • 13. 9   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. © 2010 Altimeter Group    
  • 14. 10   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. Resources 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 © 2010 Altimeter Group    
  • 15. 11     Contact Us Altimeter’s Hangar (At the Crossroads) 1875 S. Grant St. #640 San Mateo, CA 94402-2667 info@altimetergroup.com www.altimetergroup.com Consulting Inquiries David Stanley VP, Business Development and Sales Phone: 719.357.7826 Email: david@altimetergroup.com Speaking Inquiries   Mel Blake Monitor Talent Phone: 617.252.2472 Email: mel_blake@monitor.com About Altimeter Group Altimeter Group is a strategy consulting firm that provides companies with a pragmatic approach to disruptive technologies. We have four areas of focus: Leadership and Management, Customer Strategy, Enterprise Strategy, and Innovation and Design. © 2010 Altimeter Group