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Software Agreements & Cloud Computing

What does it mean when someone says your data is in “the cloud”? For starters, it has nothing to do with white clouds in the sky at all; your data is not floating above you or in the wind. But your data is stored somewhere. In fact, it is stored in different places—a lot of different places. The cloud refers to software and services that run on the Internet as opposed to running locally on your device (computer or cellphone). In the past, your documents and applications were only accessible through your computer—or via a USB flash drive. Now, the cloud makes it simple to access these same documents and applications so long as you have access to the Internet. As companies begin shifting their software towards more cloud-based models, it is that much more imperative to have a good software license agreement.


As a software developer, you are likely to want to make sure that there is a way to prevent or protect your software from infringement of copyright. That is where a software license agreement comes into play! A software license agreement is the contract between the licensor and the consumer, establishing the consumer’s right to use the software and details on how they can use it. The agreement also explains the parties responsibilities and how the software can be installed. Furthermore, the software license agreement may even have an explanation on the customer’s ability to copy or resell the software.


It is also important to keep in mind what kind of software agreement you are looking at as there are various types. There is a SaaS Agreement which stands for “Software as a Service.” This is the most common type and includes applications like Google Drive or Dropbox. This type of software that is available over the Internet. This type is usually distributed by a third-party making it easily accessible to customers. The purchaser only needs an online connection in order to access the service. Another type of software is a SaaP. This stands for “Software as a Product.” The most popular example of this is Microsoft Office. This method requires the customer to purchase a license that allows the customer to host the software themselves.


When structuring a Software Agreement is paramount to understand what technology is being used and what are the roles of the parties. Add to this data privacy concerns and how customer data will be stored, and you have the beginnings of a very robust Software Agreement.

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