The ASP Contract

Arsenault Associates recently released a checklist for anyone considering ASP software, particularly in the area of fleet maintenance. According to Arsenault, these details should be covered in any ASP agreement:

Subscription Term Be specific; include the beginning and ending dates. Include a clause that allows you to cancel your subscription agreement spelling out potential penalties.

Payment Schedule Include a statement of fees with payment terms and conditions. Expect to pay in advance for service. Include a statement providing a grace period for late payment, especially if you don’t pay by credit card.

Extra Fees Include details of any start-up fees charged by the ASP, for data conversion services, for example. Specify any products or services, such as user training, you expect the ASP to provide. Spell out the details including costs, performance, and delivery schedules.

What You Must Supply Spell out what you may be required to provide, such as names, contact information, Internet connection services, etc. Include a statement of equipment you are to provide. Note minimum-expected hardware, communication systems or Internet access, include the minimum-required access speed.

Support & Help Spell out customer support or help desk services the ASP will provide. Include response times, methods of providing help, and times available. Include assignment of a system coordinator-a trusted employee or manager. This will be the person your staff comes to with their questions or problems.

Security Get a statement covering sole and exclusive access to your data, including unique company and individual user IDs and passwords, so nobody sees your information without your written consent. Include a guarantee of regular hardware, system and database maintenance. Detail items such as daily backup with off-site storage and the way in which disaster recovery services will be performed.

Ownership Include a clear statement naming who owns the ASP service and what that service includes. Name who owns the data. That person should be you. You may want to spell out what happens if your company is sold or the ASP company is sold. Expect the ASP to impose some limitations. For example, you may agree not to sub-license or transfer your ASP contract to anyone else without prior written permission. Include a warranty and indemnification statement saying the ASP has legal title to the software and other technology and holds you blameless for any ramifications of licensing problems.

Service Guarantees Include a guarantee that the ASP will keep software, computer hardware and operating systems current and under support agreements during the term of your subscription. Clearly state maximum system downtime allowed before the ASP can be penalized, what that penalty will be and how it will be provided to you. Expect exceptions here for routine maintenance and “acts of God.” Generally, 1% downtime is acceptable.