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Software licensing in the cloud

Thomas J. Trappler | April 19, 2013
When a customer controls cloud-deployed applications, the software-licensing issues can get complicated

Customer authorizes [VENDOR] to copy, install and modify, when necessary and as required by this Agreement, all third-party software to be used in the Services.

What this means: As part of providing the service, the cloud vendor may need to access the software in order to create redundant systems, and potentially to replicate or restore the customer environment in the event of an unplanned outage or other disaster. The above language says that the customer gives the cloud vendor permission to do these things on its behalf.

Customer warrants to [VENDOR] that it has obtained any licenses or approvals required to give [VENDOR] such rights or licenses to access, copy, distribute, use and/or modify or install any third-party software to be used in the Services.

What this means: This affirms that the customer's license agreement with the software manufacturer includes the rights for the cloud vendor to access the software in the manner described above.

Some third-party software manufacturers' contract terms and conditions may become void if [VENDOR] provides services for or works on the software (such as providing maintenance services). [VENDOR] DOES NOT TAKE RESPONSIBILITY FOR THIRD-PARTY WARRANTIES OR FOR ANY EFFECT THAT THE [VENDOR'S] SERVICES MAY HAVE ON THOSE WARRANTIES.

What this means: The cloud vendor is saying that if its use of the software in providing the services causes any noncompliance with the terms of the software-license agreement, then the cloud vendor is not responsible for any adverse consequences.

Third-party software shall be exclusively subject to the terms and conditions between the third-party software provider and Customer. [VENDOR] shall have no liability for third-party software.

What this means: The cloud vendor is saying that it has no responsibility regarding the effective functioning of the software, or any adverse impacts of any malfunctioning of the software.

All this adds up to the fact that you need to clearly identify your license rights and usage needs before deploying third-party software in the cloud, then effectively capture those in your contract with the cloud vendor.

 

 

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