IT contracts series – First edition: Overview of the main IT contracts
Nowadays, IT tools are at the heart of a company’s business. Whether it’s a website, a CRM management tool, an after-sales call center or an e-commerce platform, all company activities rely on software, software packages, databases, interfaces or any other digital tool that has become indispensable.
However, the purchase of IT services and IT contracts is subject to specific requirements which, if not met, can entail legal, operational and financial risks for the company.
To shed light on the best practices and challenges in this area, our lawyers present a series of articles focusing on IT contracts, the first of which is an overview of the main IT contracts.
Software and digital tools in general are protected by copyright. Consequently, without written authorization in an appropriate license agreement, the user of the tool runs the risk of being considered an infringer, which is why the parties must agree precisely on the conditions of this use: duration, territory, right of use, number of users, IT tools concerned.
The purpose of a license agreement is to grant the user of a software tool the intellectual property rights required to use it in accordance with their needs.
Purchasing IT services is a long-term process. IT tools must evolve to ensure their compatibility with applicable regulations, as well as with the technical environment in which they are integrated. In addition, bugs, i.e. malfunctions of the tool, can occur and seriously affect the company’s business.
A maintenance contract is the right tool for managing bug-fixing services for purchased IT tools, and for ensuring that they evolve over time.
Traditionally, a distinction is made between software packages and programs. The former are so-called standard tools whose code will not be modified for different customers, while the latter are created in whole or in part for the specific needs of a customer.
To provide a framework for the development of a program or, more generally, an IT tool for a customer’s needs, a development contract must be signed. However, this is one of the most complex of all IT contracts. Its drafting and negotiation should not be neglected, and should reflect best practice in IT projects.
A hosting contract is one under which a company entrusts a third party with the backup of its softwares, IT infrastructure and data. In concrete terms, the hosting service provider maintains a secure data center and computer servers on which its customers’ IT tools are located, to ensure their continuous operation. The customer’s access to their IT tools and data is therefore remote. The key issue in this contract is, of course, IT security, and the hosting provider’s commitments in this respect, whether in terms of physical or logical security.
A variant of hosting, the cloud increases the logical security of customers’ tools by fragmenting data on different servers spread around the world. This fragmented digital environment is known as the cloud. In this type of contract, the customer has very limited visibility over the resources put in place by the service provider, which increases the importance of the service levels offered and of the agreement between the parties on this point.
The SAAS contract
The 2010s saw the emergence of a new way of purchasing IT: the SAAS contract. IT tools are offered on a turnkey basis. The SAAS provider takes charge of all the tools and issues involved in running an IT solution, offering customers a simple right to use a service that includes licensing, maintenance and hosting of IT tools. It’s a quick and easy way to access quality tools, once again at the expense of control over the company’s own tools and environment. This new mode of consumption has had a number of repercussions on the IT market, notably the rapid development of APIs, to which we’ll return in another issue of this series.
Our expert IT lawyers will help you to draw up your IT contracts in such a way as to protect your interests in the light of the specific features of your business. Our meetings can be held face-to-face or by videoconference. You can book an appointment directly online at www.agn-avocats.com.
AGN AVOCATS – Intellectual Property and Digital Law Department
09 72 34 24 72