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Updating SaaS Agreements as Your Business Grows

Jul 17, 2024
7 min read

A SaaS company wins a larger customer. The subscription value is attractive, and the account supports its move into enterprise sales. During negotiation, the company agrees to additional onboarding, faster support and several customer-specific requirements.


After signing, the implications become clearer. Implementation requires more work than anticipated. Support obligations draw on senior technical staff. The customer expects services that the delivery team understood to be separately priced.



Revenue has increased. The resources required to support it have increased as well, without a corresponding change to the commercial terms.


This is a common point at which a SaaS agreement begins to fall behind the business. Terms developed for a simpler product and customer base remain in use while the offering, sales process and delivery commitments become more complex.


Updating SaaS agreements helps leadership align those commitments with the economics and capabilities of the company. It is part of contract modernization: reviewing existing agreements so they reflect how the business operates today and the growth it intends to pursue.


The Agreement Should Reflect the Current Offering


An early SaaS product may be sold on straightforward terms: access to defined functionality, a specified number of users and standard support.


As the business grows, the offering often expands. Customers may purchase implementation, data migration, integrations, training, premium support or additional functionality. Some elements are included in the subscription. Others require separate pricing and delivery commitments.


The agreement needs to make those distinctions clear.


If the documents describe the entire relationship as a single subscription, customers may reasonably expect more than the business intended to include. Teams then have to resolve the difference after the deal has closed, when the commercial conversation is more difficult.


The review should begin with the offering itself. What does each plan include? Which activities require a separate scope? What depends on customer participation or third-party systems?


Clear answers provide the foundation for terms that sales can explain and delivery teams can administer.


Protect the Economics Behind Recurring Revenue


Subscription revenue does not reveal the full cost of serving an account.


Implementation effort, support demand, integrations and negotiated commitments all influence the relationship’s profitability. A standard agreement may leave those costs insufficiently defined, particularly when larger customers introduce requirements the business has not previously encountered.


Consider a provider that includes onboarding with an annual subscription. Its usual process involves a limited data import and one training session. An enterprise customer requires several migrations, department-specific training and assistance configuring external systems.


If the agreement does not define onboarding, the customer may regard all of that work as included. The delivery team may regard it as a separate implementation project.


Resolving the issue requires more than a clearer description. Leadership needs to decide what the subscription price supports, which services should be separately charged and how additional work will be approved.


The contract should record those decisions before resources are committed.


Separate Subscription Access from Implementation Work


Subscription access and implementation services involve different activities and dependencies.


Access may be made available for a recurring term. Implementation may require customer information, agreed milestones and specific deliverables. Integration work may depend on systems outside the provider’s control.


When these activities are combined without clear boundaries, uncertainty can arise around timing, completion and payment.


For example, the provider may assume subscription billing begins when access is available. The customer may expect billing to begin only after implementation is complete. If implementation is delayed because the customer has not supplied required information, the parties may disagree about when charges should start.

The agreement should address that relationship expressly.


Depending on the offering, a business may use an order form for subscription details and a statement of work for implementation. The documents should coordinate billing dates, responsibilities, dependencies and any relevant completion process.


This gives both parties a clearer understanding of what must happen and how a delay or change will be managed.


Make Support Commitments Deliberate


Support obligations can expand through a series of apparently modest concessions.


A customer requests faster responses, access to named personnel, additional reporting or assistance outside ordinary support hours. Each request may be manageable in isolation. Across several accounts, the combined commitments can affect staffing and cost.


These requirements may be justified by the value of the relationship. They should be assessed against the resources needed to deliver them.


The agreement should distinguish standard support from premium support and separately scoped assistance. Where response commitments are offered, teams should understand what they cover, how requests are classified and how the service will be administered.


Sales proposals, support policies and contractual schedules also need to describe a consistent offering. Otherwise, the customer’s expectations may be shaped by a promise that the delivery team does not recognize.


Before accepting a new support requirement, the business should know who will fulfil it, whether the price reflects it and whether the same commitment could be supported across other accounts.


Review Renewal Terms Before Changing Your Pricing Model


A growing SaaS business may need to revise how it charges.


It may introduce usage-based pricing, change user limits, create new tiers or separate services previously included in a single fee. Existing agreements can affect when and how those changes may be introduced.


Leadership should understand the position across the customer base. Which accounts have fixed pricing commitments? What notice is required? How do renewals operate? Have negotiated exceptions been recorded clearly?


A pricing change that appears straightforward internally may require different treatment for different customer groups.


Renewal procedures, subscription duration, pricing adjustments and cancellation arrangements should therefore be reviewed together. Finance and account management must also be able to administer the resulting terms consistently.


Reviewing these provisions before announcing a new model gives the company time to assess its options and plan customer communications.


Preserve Product Flexibility Without Creating Unclear Expectations


SaaS products evolve. Features improve, integrations change and some functionality may be replaced or discontinued.


Customers may rely on particular capabilities in their workflows. Enterprise accounts may also request commitments concerning specific features, compatibility or development priorities.


The business needs a clear distinction between its general product direction and obligations accepted for a particular customer.


A feature commitment can affect engineering capacity, maintenance requirements and the ability to change the service later. If accepted informally during negotiation, its consequences may not be visible to the people responsible for the roadmap.


The review should consider the core agreement alongside order forms, proposals and customer-specific schedules. Product and engineering teams should help assess what the company can support and which commitments require further approval.


This allows leadership to evaluate the opportunity with a fuller understanding of the resources involved.


Assess Enterprise Requirements Across All Documents


Enterprise negotiations often involve more than the subscription agreement.


Customers may introduce service-level schedules, data processing terms, security requirements and procurement documents. Commitments can accumulate across these materials without being considered as a whole.


A service schedule may describe availability differently from the core agreement. A security response may require qualification before becoming a contractual commitment. A customer-specific requirement may depend on a capability or procedure the company has not implemented.


The review should bring the relevant legal, technical and operational perspectives together.


The objective is a coherent set of commitments that accurately reflects the service.


Where privacy, security or other requirements need specialist assessment, that work should be identified in the scope rather than assumed to be covered by a general template update.


For leadership, the important question is whether the company understands the combined obligations it is accepting.


Establish a Repeatable Approach to Negotiation


As enterprise sales become more frequent, the company should not need to resolve the same contract questions from the beginning each time.


A practical framework can identify the standard position, acceptable alternatives and changes requiring further review.


Approval should follow the substance of the decision. Finance may assess extended payment terms. Product and engineering may evaluate technical commitments.


Operations may confirm support capacity. Legal counsel may review how the proposed terms allocate obligations and exposure.


This gives sales a clearer route to move negotiations forward.


It also makes material concessions visible. A valuable account may justify different terms, but the decision should account for the cost and complexity of supporting them.


Guidance should be informed by recurring negotiation issues and updated as the company’s offering develops.


Start with the Agreements Supporting Your Next Stage of Growth


Updating SaaS agreements does not require replacing every document at once.


The review can begin with the company’s immediate priorities: enterprise expansion, a new subscription model, additional implementation services or upcoming renewals.


Signed customer exceptions, recurring negotiation comments, implementation overruns and unusual support demands can help identify where the documents no longer fit the business.


The appropriate scope may be a targeted update to the subscription agreement and order form. A more complex offering may require coordinated changes to implementation schedules, support terms and negotiation guidance.


Templates for future transactions should be distinguished from existing signed agreements. Current commitments require their own assessment, including the applicable amendment process and any necessary agreement from the customer.


A defined first phase makes the work easier to manage and directs attention to the decisions that matter now.


Put Updated Terms into the Sales and Delivery Process


Revised documents need to reach the teams making and fulfilling commitments.


Sales should know which documents apply to each offering and which changes require approval. Implementation teams should understand the agreed scope and customer dependencies. Finance should be able to administer subscription dates, billing milestones and renewals.


Approved templates need clear ownership and reliable access. Customer-specific departures should be recorded so that the business can find and manage them after signing.


The framework should also be revisited when the offering changes. New services, pricing structures or enterprise requirements may alter the assumptions behind existing terms.


The practical outcome is better visibility into what the company has promised and what it will take to deliver. That information supports more deliberate pricing, negotiation and resource allocation.


Before Your Next Enterprise Deal or Pricing Change


If implementation regularly exceeds the work you priced, customer negotiations introduce commitments your teams struggle to support, or renewal terms complicate pricing changes, your subscription agreement may no longer fit your business.


These patterns warrant attention before they become embedded in more customer relationships.


Reviewing the terms before the next major deal, renewal or commercial change gives leadership an opportunity to address the gaps before accepting further commitments.


Discuss Your SaaS Agreements with Delta Law


Delta Law helps SaaS businesses update subscription agreements and related documents to reflect their current offering, delivery requirements and growth plans.


During a consultation, we can discuss the issues you are encountering, identify which documents may need attention and outline an appropriate scope for review.


This gives you a clearer basis for deciding whether a targeted update or broader modernization project makes sense.


   

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