Your contractual relationship with your customers
Microsoft offers you, as a SaaS provider, a set of standard terms that you can use when entering into agreements with your customers.
It is tempting to use these standard terms when offering your SaaS services.
With more than 400,000 suppliers in the marketplace, all with different business models, risk profiles, delivery models, etc., it is not possible for Microsoft to create terms that hit the mark for all suppliers. For example, the definition of your pricing metrics is often not tailored to your business model.
Now, you have two options: (1) you can adapt to Microsoft’s standards with an addendum to fit your business, or (2) you can create your own terms tailored to your business.
The challenge is that you don’t have many attempts to get it right.
Microsoft states that you do not have the option to switch from their standard terms to your own terms after your services are published.
Standard Contract for Microsoft Commercial Marketplace – Marketplace publisher | Microsoft Learn
We recommend that you systematically analyze:
- Your business model (e.g., pricing model)
- Your risk profile
- Your delivery model
- The service levels you are willing to offer (Microsoft standard terms only contain a placeholder for SLAs; you need to create them yourself)
- Your market conditions
- Regulation and compliance
Once you have analyzed your business, you can assess whether Microsoft’s standard terms fit your business.
Often, you will find that adjustments are needed to the terms or that you need to create your own terms for your customers.
Your contractual relationship with Microsoft
In addition to your contractual relationships with your customers, you should also consider whether your services align with the terms Microsoft offers.
Microsoft does not negotiate its standard terms. Therefore, you must adopt these terms into your business model.
For example, it can be a challenge to understand what Microsoft will charge for their cloud service.
Therefore, it is important that you align your delivery model with Microsoft’s standard terms. For instance, do you charge per user? Do you sell an enterprise license?
The central question is: How do you ensure, in this setup, that your product is relevant and competitively priced both in the short and long term?
Legal advice for SaaS providers on the Microsoft Azure Marketplace
It can be a fantastic idea to join the Azure Marketplace. But don’t do it blindly. Contractus has developed an analysis model that matches your product or service and your delivery model against Microsoft’s standard terms, so you know exactly how to navigate your business legally and commercially with Microsoft.
Interested in an obligation-free conversation? Contact us