Software delivered by a vendor as a service can help reduce costs related to software acquisition. Although businesses may find it easier to find the budget to acquire software as a service (SaaS) instead of purchasing software outright, it may be less clear as to what kind of license is appropriate.
Generally, software is delivered with certain limited rights to copy and install software onto a computer. When purchasing SaaS, there is typically no need to install a copy of the software. Because there is no need to copy software, a traditional software license with the right to copy and install the software is probably not appropriate. Instead, when licensing SaaS, publishers commonly select a right to use ("RTU") license.
An RTU license resembles a typical software license in that it grants the right to use the software without allowing the users to make copies. In some instances, smaller providers attempt to retrofit an existing software or services contract template agreement with a new RTU grant. Unfortunately, such an approach can cause serious conflicts throughout the remainder of the agreement.
When considering selling or acquiring a SaaS solution, it may be useful to consult with an attorney experienced with dealing with such matters to help ensure that the appropriate terms and conditions are used for the transaction.
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