SaaS Tips by Sapna | Tip No. 7 – Renewal Options

Unless you don’t intend to continue providing the service after the initial term, your SaaS contract will usually have some sort of renewal option built in. Renewals can take place automatically, at the customer’s option or on mutual agreement of the supplier and customer. Each renewal type has its pros and cons to consider when picking the right renewal option for your product.

How do you extend a SaaS contract?

When you first sign on to a SaaS service, you will likely sign on for a limited time period, anywhere from a month (usually for B2C services) to 5 years. Does that mean that after 5 years, you no longer have access to the service?

Ensure that your SaaS contract provides you a right to renew the contract after the initial term, otherwise the supplier has no obligation to continue providing you the service.

Renewal clauses can take various forms:

  • The contract will automatically at the end of every terms unless either the supplier or the customers says it doesn’t want to renew anymore.
  • The contract will renew only if the customer lets the supplier know that it wants it to renew.
  • The contract will renew only if both parties agree to such renewal.

To learn more and join in the discussion, check out my LinkedIn post.

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