1. Cloudy with a Chance of Meatballs
Cloudy with a Chance of Meatballs? A Real-World, Practical Conversation About Cloud Computing Services Agreements John Wilson, Shannan Frisbie, Carley Andrews, K&L Gates LLP Kevin Fay, Assistant General Counsel, VMware, Inc Association of Corporate Counsel Washington –Technology Summit June 7, 2018

2. Agenda Introduction of panel members Overview of cloud computing
Panel discussion regarding negotiating positions of the parties and key provisions in cloud services agreements
Audience Q&A
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3. Panel Members

4. Panel Members
Shannan Frisbie Technology Transactions Partner K&L Gates Carley Andrews Kevin Fay Assistant General Counsel VMware, Inc.
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5. Cloud Terminology

6. What is the cloud? Fundamental characteristics
Software, platform or infrastructure resources delivered over the Internet
On-demand scalability and elasticity
Scalability – the ability to scale up or down; offers “unlimited” resources
Elasticity – the ability to provide the amount of resource which a customer needs at any given time; add or remove resources
Utility/subscription billing
Utility– payment based on amount of resources used
Subscription – payment based on period of time
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7. Layers of cloud services
SaaS
PaaS
IaaS
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8. cloud computing platform examples
SaaS PaaS IaaS
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9. Differences between enterprise software and saas
Technically, enterprise software is licensed, while SaaS is subscribed (unless Subscriber needs a right to copy or to do something else that is protected by copyright law)
However, cloud-based agreements typically use “licensing” terminology, or are coupled with a separate license
Maintenance (including requirements to send updates and upgrades) is important in an enterprise deal, but not in a SaaS deal (Provider maintains the most current version of the software for all customers)
However, Service Level Agreements (SLAs) remain important to Subscribers
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10. Some transactions involve both Saas and enterprise software
For example, Provider may provide its main offering online or “in the cloud,” but give Customers a software application to install on their computers to use certain data from the online service, or to provide some measure of offline functionality
In this type of situation, you would need software license terms wrapped into the larger services agreement
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11. Types of Clouds

12. Public, private, hybrid and community clouds
“Public” clouds are environments open to and shared by a variety of different Subscribers
In contrast, “private” clouds are custom environments used only by one Subscriber (perhaps including related entities)
Economies of scale can still be achieved, particularly for large companies; more control can be exerted, though not all risks can be contained
Hybrid clouds contain aspects of both public and private clouds
Community clouds are shared among several organizations but from a specific group with common goals/concerns
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13. Benefits of the Cloud

14. Benefits of the cloud: provider’s perspective
The cloud allows for Providers to service multiple customers with a minimum of hardware
Economy of scale, lower overhead costs
Revenue / commercial advantage from data aggregation
Provider only has to provide that amount of computing power necessary to meet customer demand at any point in time
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15. Benefits of the cloud: subscriber’s perspective
Fundamental characteristics: scalable, elastic, on-demand, flexible payment
More space, equipment and computing power than Subscriber otherwise could afford and maintain as enterprise hardware and software
More advanced security than Subscriber might otherwise be able to provide
Perhaps better organization and indexing of data; optimization of data processing
Operating v. capital expense
Subscriber only has to pay for what it needs, and more power and space is available on short notice if needed.
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16. Panel Discussion

18. Panel discussion Topic 1: Data Security in the Cloud
Topic 2: Warranties in a Cloud Services Agreement
Topic 3: Indemnification
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19. Panel discussion Topic 4: Limitations of Liability
Topic 5: Termination Rights/Migration Assistance
Topic 6: Service Level Agreements
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20. Panel discussion
Topic 7: Other key provisions in Cloud Services Agreements
Audit rights
Fees
Insurance
Force Majeure
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21. Audience Q&A

22. Contact information
Shannan Frisbie
Carley Andrews
John S. Wilson
Kevin Fay
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