As a thin guy, I used to subscribe to the philosophy of wearing large clothes to look bigger than I was. What I actually looked like was a scrawny guy in ill-fitting clothes that were not overly comfortable.
Sourcing of IT and associated services may be falling into a similar trap. Rather than using agreements that are the right shape or size, purchasing organizations are developing and rolling out standard templates that are supposedly broad enough to cover everything–unfortunately, they often do not cover any particularly purchase properly. Specifically, we are seeing a proliferation of master service agreements (MSAs) that, largely speaking, come from an IT development context. These are then begin applied to software licensing, professional services; and cloud services agreements–all of which are different transactions with different needs.
To illustrate, let’s review the application of an MSA to a Software as a Service (SAAS) offering. As a threshold, the MSA contemplates project style initiatives, whereas the SAAS offering is by its nature on ongoing, recurring offering over a specified term. Under an MSA, the buyer typically attempts to assert ownership of all developments; this is antithetical to the SAAS model where the supplier contributes IP to continually improve its offering. Under the MSA, the buyer heavily negotiates the service levels; in SAAS, the service levels are the same for all like buyers–without such consistency, there is no shared offering and no cost benefit of the SAAS model. We could go on, but the point is clear–a customer MSA is not likely to be a good fit for a SAAS offering.