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Traditionally, most businesses?used software installed on?their?own systems that was documented by a software license.?

It is?becoming more common?to use?cloud?based?software?or SAAS?that is documented by a?services?agreement. ?

One difference is that?there can be?multiple layers. The services agreement?may be subject to or intertwined with a?software?license,?a?cloud platform provider, and?a?reseller. Those can all be different parties with different terms. Each layer may?impose?the terms of underlying providers. ?

The business using the services can be stuck with the terms of the agreements and parties underneath?their provider?without the ability to negotiate the terms of the underlying agreements. The parties at the bottom or middle of the chain may require?those?above them to include certain terms. The party providing the services may be faced with pressure by its customer to alter those underlying terms.?

No matter where one sits in that chain, they need to think about what is happening in practice, what each party is doing, how risk should be allocated, and what the expectations of each party should be. That will help sort out how it should be documented in?a?realistic?way?considering?the business model, and?in a?way?each party can live with.

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