Software as a service contracts – You need to pay attention to the fine print


Are you considering a move to (SaaS) Software as a Service contracts for your Business Intelligence environment?

Are you being lured by the promises your software salesperson is saying about the savings in time and money the cloud can offer?

As a business analytics coach and licensed attorney, I am here to tell you IT needs to read the fine print in BI Software as a Service contracts!

Before we move forward, if you are unfamiliar with what SaaS is and how it’s different than a license, check out our blog "Cloud Basics: Little Hazy On Cloud Computing? We Clear The Confusion!" and Mark Grossman’s blog "Saas Deal vs. License". For the purposes of this blog, I will assume you know the difference and love what SaaS has to offer.

Software as a service contracts

Yes, on the surface Software as a Service  contracts look fabulous with vendors like IBM Cognos, Anaplan, Host Analytics, and more as they tout things like "100% availability" and "24/7 and 365 availability and monitoring." They also mention your staffing cost could go down as a result of the vendor manages the system.

Why did I just highlight that? Let me repeat it: the vendor manages the system. This is a good thing right? Did you stop to think what happens when “sh*t happens”. You see, BI SaaS gives IT a whole new responsibility. IT no longer has to manage the systems and do upgrades, they have to manage the vendors. So, do you know what the rules are that the vendor will play by? How much notice will they give you in the event of a security breach or data loss? Do they even have to notify you? What happens when it goes down during month end close? How fast will they get it back up and what if they don’t?

As a business analytics coach, I talk with IT and finance professionals all the time that are considering signing  Software as a Service contracts and they say, “we have a procurement department or legal department that will handle the contracts.” That’s when the vision of a burning cloud pops in my head! You know it’s hard to tell the difference between a cloud and smoke. Here’s a little secret. Most lawyers are very ignorant when it comes to negotiating Software as a Service contracts and procurement departments are even worse. They don’t fully understand the ramification of security breaches, systems that are down, and lost data. But I am guessing you do.

Before you sign, IT needs to read the fine print in Software as a Service contracts! Many of the SaaS contracts I have read don’t reflect at all what the vendor’s marketing message professes. We call that the fine print! 

I'll give you an example from one "standard" contract I read:

…Unless expressly stated in the applicable Vendor SaaS Specifications, the Vendor SaaS is not intended for the storage or receipt of any: 1) Personal Data and other data, the loss of which would trigger a data breach notification requirement…

Hmm… I am thinking if my data was breached, I would want to be notified regardless. Furthermore, I struggle with what useful data would you put in a BI SaaS cloud that you wouldn’t care about if it was breached?

So the moral of the story is this. IT needs to read the fine print in Software as a Service contracts and advise the lawyers on what they can live with or without.

The contract is defining the rule by which you will be living. Don’t you want to know the rules?

software as a service contracts


If I have piqued your interest and you want to learn more, I have created a two-part video covering what you need to consider when negotiating Software as a Service contracts. This video is packed with valuable information the software vendors don’t want you know. The video is only available to our Lodestar Solutions Analytics Coaching Club members.

To become a member, all you have to do is join the club and there is no cost to join. Email and let us know you want to sign up. Once you sign up, you will have immediate access to our Analytics Coaching Club library which contains the "Hidden Dangers of SaaS Contracts" video and much more.  You can return to the library at any time by visiting and clicking the login button in the top right corner.

If you are exploring IBM BI Cloud or Performance Management (TM1) Cloud, we would be happy to help you evaluate your options so don’t hesitate to contact us at