What You Are Actually Buying: SaaS Agreements, Service Levels, and the IP Underneath
By Casey Scott McKay ·
A software-as-a-service agreement is not a software license, and treating it as one produces the recurring disappointments of technology procurement. This article explains what a subscription actually conveys, why the license grant matters less than the access and user definitions, and how service levels are structured so that credits rarely compensate for outages. It covers the data provisions that decide the most valuable question in the agreement — who owns the customer's data, what the vendor may do with usage and aggregated data, and what happens to feedback — along with the intellectual property indemnity and the liability cap that determines whether it means anything. It then addresses security, privacy, and subprocessor terms, audit rights, renewal mechanics, and the exit provisions that are negotiated last and matter most.
IP and Technology > Information Technology | Article | Published 16 March 2025 - Updated 10 January 2026 | Casey Scott McKay - marksy.us
Summary. A software-as-a-service agreement is not a software license, and treating it as one produces the recurring disappointments of technology procurement. This article explains what a subscription actually conveys, why the license grant matters less than the access and user definitions, and how service levels are structured so that credits rarely compensate for outages. It covers the data provisions that decide the most valuable question in the agreement — who owns the customer's data, what the vendor may do with usage and aggregated data, and what happens to feedback — along with the intellectual property indemnity and the liability cap that determines whether it means anything. It then addresses security, privacy, and subprocessor terms, audit rights, renewal mechanics, and the exit provisions that are negotiated last and matter most.
Keywords: SaaS agreement, subscription versus license, access rights, authorized users, service level agreement, uptime credits, support tiers, customer data ownership, usage data, aggregated data, feedback clause, IP indemnity, limitation of liability, security addendum, data processing agreement, subprocessors, audit rights, term and renewal, exit and data portability, source code escrow
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