In addition to ongoing subscription fees or usage based pricing, some B2B software vendors charge for implementation and other professional services. This is more common when selling to large enterprises, as they need more help with change management and often allocate budget for services along with any new software purchase.
Companies that charge for professional services have a choice between specifying those services in the optional “Professional Services” field of the Cloud Service Agreement (CSA) or if they should creating a separate Professional Services Agreement (PSA). For most of our users, their decision comes down to whether they are software-first or services-first.
Software-First Companies
- Your revenue primarily comes from selling software
- Implementation and other professional services exist mainly to drive software adoption and success
- Services are relatively straightforward and time-bounded
→ Professional Services field in the order form of the CSA or Software License Agreement is most common.
Services-First Companies
- Services represent your primary revenue stream
- You would sell similar services to a customer who isn’t buying your software product
- Services extend beyond software enablement
- Additional services projects and engagements are expected in the future
→ Separate Professional Services Agreement is most common.
Default to simple
When in doubt, stick with the simpler approach of a single agreement. That makes things easier across drafting, negotiating, and keeping track of your agreements over their entire lifecycle. As your business grows, you may need to add additional contracts like a Data Processing Agreement or Business Associate Agreement for compliance. Need the actual agreements? Check out the free, open source standard contracts used by thousands of companies.