Service Levels For SAAS

Keywords: software-as-a-service, outsourcing transactions

Customers are rapidly increasing their use of software-as-a-service ("SAAS") solutions and other cloud services as part of their sourcing strategy. Cloud solutions offer the flexibility to quickly ramp services up and down, with typically little or no exit costs. However, cloud providers are able to offer flexible and cost-effective solutions because their offerings are standardized. Accordingly, customers find that providers of SAAS solutions are less likely than traditional outsource providers to negotiate services levels (as well as other contract terms) to meet the customer's particular business needs. Accordingly, customers should understand the limited negotiating flexibility with cloud providers and how to mitigate the service level limitations, where possible.