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The Danger of Remotely Managed (i.e. cloud-based) Software

Today you can buy a lot of software on a subscription, cloud basis scheme.

Of course, from the software-house point of view there are no issues.  But from the users’ perspective the fact that cloud, subscription-based business models are widely enforced by the market, and that its supporters claim this to be an advantage for the users doesn’t turn a bad management choice into a good one.

In the last months I had to handle  cases of companies literally “ransomized” by the software houses who first developed specific application with the help of the company itself, and then claimed a full-ownership on the result, sold back on a “as-a-service, cloud based” business model.

The element common to those cases was that when a controversy arose, the first thing the software house did was to block the access to the “service” thus forcing the company to negotiate from a very weak position. As you may guess, another (typical) element of these cases is that no lawyer has been involved in the early stages of the software development negotiation, thus leaving the companies in an uncomfortable position.

This is actually nothing new in the grand scheme of  things. The history of software litigation is full of  logic bombs hidden everywhere, from industrial machinery to simple applications, to be exploited in case of (alleged) licensee’s misbehaviour. But what makes me uncomfortable with the “cloud variable” is that in this case a company doesn’t have an actual possibility to carry on its business while handling the litigation.

Ideally, a properly-managed software license agreement would include provisions regulating the source code access and/or escrow, the clear attribution of software authorship, a safeguard mechanism to avoid that the original developer becomes – de facto – a stakeholder of the company by being the sole and only authorized to provide services based on his (alleged) software ownership or, furthermore, the ban of every behaviour that might block or limit the company operation. These are just a few things that might help to de-escalate a controversy and find an amicable settlement instead of take the issue in court or suffering other kind of damages.

You can’t always get such kind of safeguards, especially when negotiating with the US giants, but there are a lot of cases where the software house is not part of the Big League and thus amendments to its standard, Cloud-EULA addressing the specifics of granting the access to service even in case of controversy  could and ought be obtained.

 

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