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Cloud Service Agreement Benchmarks

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Jake Stein

Founder's Spotlight

Jake Stein, Founder and CEO Common Paper is a multiple time founder of B2B SaaS companies including his third with the goal to help standardize Master Service Agreements across the Cloud industry.

In today's episode we will be covering three main topics:

  • Vision behind standardizing Cloud Service Agreements

  • Cloud Service Agreement Benchmarks

  • Challenges and Advantages of being a multiple time B2B SaaS founder

What was the catalyst behind founding Common Paper? Jake highlighted that everything regarding contracts in his previous two start-ups was just too hard! Starting a partnership with the debate and sometimes misalignment that goes with contract negotiation is not consistent to a mutually beneficial partnership. Jake highlighted that when you buy a house - almost every state has a standard real estate purchase agreement. Even the B2B Tech industry has standardized some fund raising agreements, such as the SAFE agreement.

The first participants are often early stage SaaS companies, who have a strong desire to remove the friction and resources required for new customer agreements. Currently 20,000 different companies have downloaded the standardized agreement, and 1,000+ companies have used the Common Paper platform to sign the standardized agreements with their customers.

As a by product of having 1,000+ companies using the Common Paper standard Cloud Service Agreement - this provides unique access to the data and metrics associated with all the contracts being signed on their platform. Some of the interesting benchmarks include:

  • 90% of Cloud Service Agreements have an auto renewal clause

  • 29% of Cloud Service Agreements have built in price increases (averaging 5% - 8% per year)

  • 70% of Cloud Service Agreements are annual subscriptions

  • 48% invoice monthly and 40% invoice once annually

  • 85% of Cloud Service Agreements cap "Limitation of Liability" at 1x fees paid in previous 12 months

  • The presence of Data Privacy and AI increased 10x over past 12 months (2.5% to 25%)

To see the rest of the benchmarks from the Common Paper Cloud Service Agreement click here.

If you are responsible for writing, negotiating or signing Master Service Agreements with SaaS and Cloud companies, this conversation with Jake is chalked full of hard to find insights and benchmarks for the terms and conditions being used today!

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