Introduction to Software as a Service (SaaS)Q4 2015

Last Updated: 04/11/2015

Passport Advantage Enablement Week

Agenda

1. What is Software as a Service (SaaS)?2. Contractual Options

• PA• CSA

3. Part Number Types4. SaaS Ordering Concepts5. Renewal Options6. Billing Models

• Up-front• Monthly in Arrears• Quarterly in Advance• Yearly in Advance

7. SaaS Order Submission8. SaaS in FastPass

What is Software as a Service (SaaS)?

Software as a Service (SaaS) is a software delivery model in which the software is owned and managed remotely by a SaaS provider and delivered on a subscription basis to end users via the internet or secure lines, in a one-to-many model.

Key SaaS Characteristics● The governing agreements are either:

● IPAA and ToU (Terms of Use) or ● CSA (Cloud Service Agreement) and SD (Service Description)

● Stream revenue recognition (starts at beginning and continues through term of the agreement)● The customer has the right to use the service on a subscription basis - usually with a multi-year term commitment and billings that could vary (either monthly, quarterly, annual or up-front).● The term of the service can be between 1 and 60 months.

Software as a Service

Subscription to IBM hosted service

1 to 60 months (typically 3-5 years)

No anniversary date – Contract end date

Same price in all RSVP Band Levels (including Gov/Academic)

0 RSVP points for SaaS part numbers

On-Premise software

Licensed with perpetual or fixed Term

Typically licensed with 12 months S&S

Anniversary date

Different discounts in every RSVP Band level

Accumulation of RSVP points

Highlights of Selling Models

New clients may subscribe to IBM SaaS services in two different ways:1. Cloud Service Agreement (CSA) + Service Description (SD)

• CSA only covers IBM SaaS/Cloud products2. Passport Advantage Agreement (PPA) + Terms of Use (ToU)

• PPA covers perpetual/term license, appliance and SaaS/Cloud products

Offering specific Service

DescriptionCSA +1

PA +General Terms of

Use+

*

Offering Specific

Terms of Use

2

Contractual Options

SaaS: Cloud Services Agreement

• CSA is a simplified agreement for ordering of SaaS services– Contains standard legal terms and conditions for SaaS

• Service description describes standard features and functions of eligible product offering– Accepted by reference when customer places order

Cloud Service Agreement

• CSA is a– base agreement outside PA between IBM and the end user customer

that represents a relationship for acquiring SaaS / Cloud offerings.– simplified 2-3 paged IBM-Customer agreement designed for new

customers that don’t have a Passport Advantage Agreement.

• Customers can– have a relationship, where customer signs an agreement once and

references it in ordering (CSA Relational). This agreement requires CSA enrollment.

– for each order accept the terms & conditions by action, there is no signed agreement, (CSA Transactional). It doesn’t require CSA enrolment.

• Service Description (SD) – is the document that provides the specific terms and conditions for a

SaaS/Cloud offering.– When presenting a CSA to a customer, always include the offering’s SD

and provide them early in the contracting process.

Cloud Service Agreement Relational Enrolment

• CSA Relational requires the following enrolment documents:

- Customer signed CSA to be attached to the initial order. - For Channel orders submitted via B2B an Enrolment form filled in by the

customer is also needed. It needs to be sent by email together with the signed CSA to EMEA STS task id - CMT@ie.ibm.comCMT@ie.ibm.com

• No enrolment is needed for CSA transactional

CSA enrollment form

• PA ( together with PA Express) is the primary licensing acquisition and software subscription and support program for IBM distributed software solutions, SaaS and Appliances across all IBM Software Group brands

• To accept the agreement terms the Customer submits a completed enrolment form and initial order.

• When acquiring IBM SaaS products through PA the customer has to agree to the SaaS TOU:

– General SaaS TOU – Brand specific TOU

Passport Advantage

Passport Advantage Enrolment

• Enrolment documents:- IBM International PA Agreement (IPAA)

- IBM International License Agreement (IPLA)- Enrolment Form

• Customer must complete the enrolment form, they are accepting terms and conditions by submitting it.

• Have the customer review the agreement and submit enrollment form:

-Online at http://www-306.ibm.com/software/howtobuy/passportadvantage/ (not available for Government & Education customers)

• Or by email to (mandatory if signature is required):• EMEA CF task id - CMT@ie.ibm.com

• Passport Advantage agreements and forms• Terms of Use ( to be used with PA)• PA enrolment form• Cloud Services Agreement (CSA)• Service Description (to be used with CSA)

Agreements - Useful Links:

Part Number Types

SubscriptionDaily FeeOverageSet up

Charge for committed Subscription offering

Daily Fee part number has been eliminated from May 11th 2015.

It was used to bill the usage from provisioning date to end of first month.

The subscription period now starts on the day it is provisioned & extends for the exact duration of the term making the Daily Fee unnecessary.

Charge for usage above committed Subscription Level required on every order.

It allows users to exceed their purchased authorized user entitlement.

It is automatically measured & billed monthly

Set-up parts applicability dependent on offering.

One-time setup ONLY billed on first customer setup.

Set-up fee only exists for some Brands

SaaS Ordering Concepts

Trade-up Add-on Ramp-up

Allow gradual deploymentIncrease the quantity on a service or add an optional or complementary service. The end date is co-termed to the existing service.

Replace an existing service with a different service of equal or greater value. The end date is co-termed to the existing service.

Renewal Options

Renewals Renewalsoptions

Cancellation SaaS renewalExpiration report

Cancelation of a SaaS Service usually requires notice 90 days before the end of the subscription period.

Sent to all VAD on a monthly basis.

It contains the list of active IBM SaaS subscriptions that will expire within the next 180 days

1.) Automatic renewalfor the original term

2.) Automatic renewalfor 12 months

3.) Continuous billing

4) No renewal (termination)

Contract automatically renews at expiry.

The renewal terms for each product are specified in the product's Terms of Use.

Billing continues per service agreement at contract end.

Billing Options

Upfront in advance

Monthlyin arrears

Quarterly in advance

Annual in advance

Invoices are issued in arrears (billed after the full month of use)

Invoices are issued in advance of the use of the service for 3 months

Invoices are issued in advance of the use of the service for 12 months.

Invoice is issued in advance of the use of the service for the full Agreement Term

SaaS Billing Models Explained

• There are three possible billing dates:– Bill on the provisioning date (Default Option)– Bill on a customer selected day of the month – Bill on the day the order is placed (in this case the billing date matches the day STS

removes the FOP holds)

• Subscription charges are now invoiced as follows per billing frequency selected:– Up-front in Advance: Invoiced for the full subscription term on the first billing

date that occurs after the order is provisioned.– Annual in Advance: Invoiced for the first 12 months of the subscription term on

the first billing date that occurs after the order is provisioned and then annually the billing date before the start of the new annual period.

– Quarterly in Advance: Invoiced for the first 3 months of the subscription term on the first billing date that occurs after the order is provisioned and then quarterly the billing date before the start of the new quarterly period.

– Monthly in Arrears: Invoiced for the first month of usage on the billing date in the month after the first month and then invoiced monthly.

• For Monthly in Arrears, if the provisioning is not the last day or first day of a month then the subscription charge for the first month and last month is prorated. – The prorated charge for the first invoice is from the service start date to

the end of the initial month. – When the subscription is cancelled, if the subscription end date was not

set to the last day of the month then the invoice for the last month of usage will also be prorated. The prorated charge for the final invoice is from first day of the month to service end date.

SaaS Billing Models Explained

SaaS Billing Models Explained

• Requested billing date: 15th

• Provisioning date: 20/08/2014• 6 months term

Monthly Billing in Arrears

28/07/2014Order placed

20/08/2014Provisioning complete

15/09/2014First Invoice from20/08 to 31/08

15/10/20142nd Invoice from01/09 to 30/09

15/11/20143rd Invoice from01/10 to 31/010

15/12/20144th Invoice from01/11 to 30/11

15/02/20156th Invoice from01/01 to 31/01

15/01/20155th Invoice from01/12 to 31/12

15/03/20157th Invoice from01/02 to 19/02

• Requested billing date: 15th

• Provisioning date: 20/08/2014• 12 months term

Quarterly Billing in Advance

28/07/2014Order placed

20/08/2014Provisioning complete

15/09/2014First Invoice from20/08 to 19/11

15/11/20142nd Invoice from20/11 to 19/02

15/02/20153rd Invoice from20/02 to 19/05

15/05/20154th Invoice from20/05 to 19/08

• Requested billing date: 15th

• Provisioning date: 20/08/2014• 36 months term

Yearly Billing in Advance

28/07/2014Order placed

20/08/2014Provisioning complete

15/09/2014First Invoice from

20/08/2014 to 19/08/2015

15/08/20152nd Invoice from

20/08/2015 to 19/08/2016

15/08/20163rd Invoice from

20/08/2016 to 19/08/2017

SaaS Order Submission

• SaaS orders are submitted BAU.

• SQO is the primary tool for submitting SaaS orders unless part of an ELA deal.

• If the order is part of an ELA the submission tool is IDD, flagging the entry as MEA (Multiple Element Arrangement). A SQO quote has to be attached for the SaaS portion.

• BPs submit Channel SaaS orders via BP e-order/B2B.

NOTE: Line Item hold is lifted when IBM receives acceptance from customer on Terms of Use (ToU) document

Submits the order inreference to SQO Quote

BP E-ordering or B2B

- Captures the order on Report- Enables customer service

-Requests provisioning hold removal

(Including manual processes)

Brand Project Office

DSW SAP (Fulfillment system)Service Agreement

is created

Tier 1Distributor

Tier 2Reseller Customer

Provisioning hold removal

Obtains Provisioning Details

Fulfilment process flow

IBM Sales

Submits the order in reference to Quote via SQO

- All SaaS transactions must start with a SaaS SQO

-- Terms of Use (TOU) for PA/PAE orders or Service Description (SD) for CSA orders are mandatory requirements for SaaS orders.

- Standard Firm Order Policy documents are required (eg: Purchase Order, Credit Check if required, etc.)

SaaS Order Fulfilment Requirements

SaaS in Fastpass• SaaS entitlements in Fastpass always show an end date of 31 Dec. 9999

SaaS in Fastpass• To check the actual entitlement of a SaaS product click on “Sales

Transactions”

• Click on the “Agreement Number”

SaaS in Fastpass• Then click on associated billing orders

• Fastpass lists by date all orders billed for the agreement. The last one is the latest entitlement

SaaS in Fastpass• How to check if an agreement has been renewed

– Go to Sales Orders, enter the agreement number

SaaS in Fastpass

• Fastpass screen shows the list of part numbers in the agreement. Check the field “Renewal type”