Starting any new business is difficult. Starting a new cloud computing business in a space already saturated by both entrepreneurs and established corporations is ruthless. Every dollar and every minute is precious to make your business succeed, and any misstep while growing your business may have disastrous results that, at minimum, will cost you more time and money and at worst, destroy your business. The following lists four common legal mistakes every cloud computing business should always be mindful of.


Mistake No. 1: Failing to build standard contract templates. Having a database of standard contract templates to use with customers will drastically shorten your product and/or services sales cycle and therefore increase your overall sales. Having a well-organized, attorney-reviewed, and constantly updated database of standard contracts templates will allow you to readily serve customers with quick turnaround. While there is likely a larger upfront cost by generating these templates at the beginning, the payoff is that it will free up enormous resources in the future to allow you to focus on other important aspects of your business.


Mistake No. 2: Using a one-size-fits-all approach to your business. Each cloud computing business is unique by nature of its products, services, and even culture of the company. Therefore, key steps should be taken in ensuring that your organization structure and contracts are tailored as much as possible to your needs. For example, contracts for a Platform as a Service (“PaaS”) will not suit your business if your core licensing and delivery model is a Software as a Service (“SaaS”). Also, limitations on the use or reuse of data will have to be tailored to your services.


Mistake No. 3: Failing to protect your intellectual property. As you build your business, you must be aware of the intellectual property you own and how you can protect it. First, growing your business means growing your brand equity, and that means ensuring your brand is well-protected. There are a variety of ways to accomplish this. The most basic starting point is by performing a trademark clearance search and trademark registration to ensure that your brand and business name can be owned by you. In addition, all deals that you have with both partners and customers must have iron-clad intellectual property right agreements that protect your interests.


Mistake No. 4: Following free advice. When it comes to legal advice for your business, you often get what you pay for. There are many people willing to provide complimentary advice, usually family and friends. The Internet is also inundated with dozens of websites containing free contract templates, summaries of state law, and many other tidbits of legal information. While all this material may be useful as a preliminary first step, it should never be conclusory—including even this article. Always seek professional legal advice when it comes to your business, particularly from an attorney that is experienced in the legal area you’re seeking advice.


Being cognizant of the four mistakes detailed above will allow you to avoid the pitfalls that commonly plague cloud computing businesses.