Software as a Service (SaaS)

SaaS as an External Sale Agenda Define software as a service Handling a transaction External sale vs. licensing Rate development Next steps

SaaS Software technology that is developed as result of departmental activity that may be considered for commercialization. The path of commercialization depends on the intent of the transaction and if the Intellectual Property (IP) rights will be transferred or licenses externally

SaaS as an External Sale Access to software developed/purchased by University of Minnesota paid for by the department outside of ISO/ESO. Data output from University resources that is separately priced. CPU processing of data on University resources that is separately priced.

Saas as a Licensing Agreements Licensing University technology to the private sector. University maintains ownership of the IP but allows its for use in public sector. University is reimbursed for the use of software. Runs through OTC.

Example SaaS Agreement as an External Sale Midwest Dairy Foods Research Center Collaborative effort between University of Minnesota and dairy famers. University collects data daily on dairy and other commodity markets. Users pay for annual access to data and listed reports outlined in service contract.

Key Differences External Sale: End user is paying for access to University owned software/servers. Processed as an External Sale through ESO office. License Agreement: Company has the right to create a product and resell the product. Processed as license through Office for Technology Commercialization.

Benefits of SaaS Recover costs used to develop/purchase software tools and/or servers for University departments. Revenue stream for University departments. Build relationships with outside entities. Create space for marketability as potential commercialization opportunity.

Saas Rate Development Standard cost accounting methods used. Allocate IS/ES costs/useful life/billable hours IS costs can be incremental for non-capitalized software purchases, similar to a maintenance agreement. ES costs should recover all direct and indirect costs and seek market value for service.

Key Next Steps Obtain approval from ISO/ESO office. Existing ESAF for your areas may be updated to include SaaS, otherwise new approval is needed. Work with OIT on server, web hosting, data security. Develop rates that include all reoccurring and maintenance costs. Work with ESO office to get SaaS agreement template Agreements are not currently available in contracts library. All SaaS agreements are considered high risk and require ESO review of contract.

Questions? External Sales Office extsales@umn.edu Technology Commercialization umotc@umn.edu

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