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Bridging the Gap: How Hybrid ERP Solutions Combine the Best of On-Premises and Cloud-Based Systems

As businesses navigate the complexities of digital transformation, the
adoption of hybrid ERP solutions emerges as a critical strategy. This
introduction sets the stage for an in-depth exploration of the components,
challenges, benefits, and best practices associated with Hybrid ERP
Solutions, providing valuable insights for organizations seeking a harmonious
coexistence between legacy and modern technologies in their quest for
operational excellence. Get ready to witness a new era where seamless
integration meets limitless possibilities – it’s time to discover how hybrid
ERP solutions can transform your business for good!
The hybrid approach to ERP is gaining prominence as businesses seek a
balanced integration model that caters to diverse operational needs. This
blog will explore the intricacies of Hybrid ERP Solutions, shedding light on
how they effectively bridge the gap between traditional on-premises
systems and the dynamic capabilities of cloud-based platforms.

Brief Overview of ERP Systems

Enterprise Resource Planning (ERP) systems have become an essential tool
for businesses of all sizes, helping them to streamline processes, improve
efficiency, and gain a competitive edge. These systems serve as a
centralized hub, providing a unified platform to manage and optimize a wide
range of activities, including finance, human resources, supply chain,
manufacturing, customer relationship management (CRM), and more.

However, with the rise of cloud computing technology, there has been a shift
towards cloud-based ERP solutions. These are hosted on remote servers and
accessed through the internet rather than being physically installed on a
company’s premises. While cloud-based ERP systems offer many benefits
such as scalability and cost-effectiveness, they may not be suitable for
every business.

This is where hybrid ERP solutions come in. As the name suggests, hybrid
ERPs combine the best of both on-premises and cloud-based systems to
create a powerful and flexible solution for businesses. In this section, we
will delve deeper into what exactly hybrid ERP solutions are and how they
can benefit your organization.

What is a Hybrid ERP Solution?

A hybrid ERP solution is an integrated approach that combines both
on-premises and cloud-based components to create a unified system. It
allows companies to leverage their existing infrastructure while also taking
advantage of the benefits offered by cloud technology.

In simple terms, a hybrid ERP solution connects your on-premises system
with one or more applications hosted in the cloud. This enables seamless
communication between different departments within an organization as well
as across multiple locations.

What is the difference between On-Premises and Cloud-Based

On-premises and cloud-based systems represent different approaches to
hosting and delivering software applications, including Enterprise Resource
Planning (ERP) systems. Here are the key differences between the two:

  1. Location of Infrastructure:

On-Premises: In an on-premises system, the organization owns and maintains
its own physical servers and infrastructure. The software applications are
installed and run on servers within the organization’s data center or
dedicated server room.

Cloud-Based: Cloud-based systems, on the other hand, rely on remote
servers hosted by a third-party cloud service provider. These servers are
accessed over the internet, and users connect to the software and services
through web browsers or client applications.

  1. Ownership and Control:

On-Premises: Organizations have full control and ownership of their
on-premises infrastructure. This includes responsibility for hardware
maintenance, security, upgrades, and ongoing IT management.
Cloud-Based: Cloud-based systems involve a shared responsibility model. The
cloud service provider manages the infrastructure, security, and
maintenance of the physical servers, while the organization retains control
over its data, applications, and configurations.

  1. Scalability:

On-Premises: Scaling an on-premises system typically requires additional
hardware purchases and infrastructure expansion. This process may involve
longer lead times and increased capital expenditures.
Cloud-Based: Cloud systems offer greater scalability and flexibility.
Organizations can scale resources up or down based on demand, paying for
what they use. This agility allows for rapid adjustments to accommodate
changes in business requirements.

  1. Cost Structure:

On-Premises: On-premises solutions often involve significant upfront costs,
including the purchase of hardware, software licenses, and ongoing
maintenance expenses. The organization bears the responsibility for capital
Cloud-Based: Cloud solutions generally follow a subscription-based or
pay-as-you-go pricing model. Organizations pay for the resources and
services they consume, often resulting in a more predictable operational
expenditure structure.

  1. Accessibility:

On-Premises: Access to on-premises systems is usually restricted to the
organization’s physical locations or remote access through virtual private
networks (VPNs).
Cloud-Based: Cloud systems enable users to access applications and data
from anywhere with an internet connection, promoting greater flexibility for
remote work and collaboration.

  1. Security:

On-Premises: Organizations have direct control over the security measures
implemented on their on-premises infrastructure, but they are also
responsible for ensuring the security of their physical servers.
Cloud-Based: Cloud service providers invest heavily in security measures,
including data encryption, access controls, and compliance certifications.
However, organizations must still manage user access and configurations to
maintain a secure environment.

Ultimately, the choice between on-premises and cloud-based systems
depends on factors such as organizational preferences, budget
considerations, scalability needs, and the level of control required over the
IT infrastructure. Many organizations are adopting hybrid solutions that
combine elements of both approaches to achieve a balance between control
and flexibility.

The limitations of traditional On-Premises ERP Solutions

When it comes to managing business operations and processes, traditional
On-Premises ERP solutions have been the go-to choice for many
organizations. These systems are installed on-site and managed by in-house
IT teams, providing companies with a sense of control and security over
their data. However, as technology continues to evolve, these systems are
facing various limitations that can hinder an organization’s growth and

One of the main limitations of traditional On-Premises ERP solutions is their
high initial cost. These systems require significant investments in hardware,
software licenses, implementation services, and ongoing maintenance. This
can be a barrier for small and medium-sized businesses with limited budgets,
making it difficult for them to adopt such solutions.

Moreover, these systems usually have a long implementation process that can
take months or even years before going live. This delay means missed
opportunities for businesses looking to streamline their processes quickly or
expand into new markets. It also puts them at a disadvantage compared to
competitors who may have already implemented more modern ERP solutions.

Another limitation is the rigid nature of traditional On-Premises ERP
systems. These solutions are designed with specific functions in mind and
lack flexibility when it comes to customization or integration with other
applications. With changing business needs and market trends, this
inflexibility can limit an organization’s ability to adapt and evolve

Additionally, traditional On-Premises ERP solutions often require IT
expertise to manage and maintain them efficiently. This implies additional
costs related to hiring skilled professionals or training existing staff
members. It also

The benefits of Cloud-Based ERP Solutions

Cloud-based ERP solutions have gained immense popularity in recent years
due to their numerous benefits for businesses of all sizes. In this section,
we will discuss the key advantages of using a cloud-based ERP system and
how it can bridge the gap between traditional on-premises systems and
modern cloud-based solutions.

  1. Flexibility and Scalability:
    One of the main benefits of choosing a cloud-based ERP solution is its
    flexibility and scalability. With an on-premises system, businesses are often
    limited by their own infrastructure and hardware capabilities. On the other
    hand, a cloud-based ERP system allows you to easily scale up or down your
    resources as per your business needs without any additional investment in
    hardware or software.

  2. Cost-Effective:
    Implementing an on-premises ERP system can be expensive, as it requires
    significant upfront investment in hardware, software, maintenance, and IT
    personnel. Cloud-based ERP solutions eliminate these costs by offering a
    subscription-based model where businesses only pay for what they use. This
    makes it more cost-effective for small and medium-sized enterprises
    (SMEs) that may not have large budgets for IT infrastructure.

  3. Accessibility Anytime, Anywhere:
    With a cloud-based ERP system, users can access real-time data from
    anywhere with an internet connection. This feature is especially beneficial
    for companies with multiple offices or remote workers as they can
    collaborate seamlessly without being tied down to a specific location.
    Moreover, employees can also access the system outside office hours which
    enhances productivity and improves overall business operations.

How Hybrid ERP Solutions combine the best of both worlds

Hybrid Enterprise Resource Planning (ERP) solutions have become
increasingly popular in recent years, and for good reason. These systems
combine the best of both worlds – the stability and security of on-premises
software with the flexibility and scalability of cloud-based systems. This
unique combination addresses many of the challenges faced by businesses
when it comes to choosing between traditional on-premises ERP and modern
cloud-based ERP.

Traditional on-premises ERP systems are installed and operated locally within
a company’s own servers and data centers. They offer a high level of control
over data, as well as customization options to meet specific business needs.
However, these systems can also be costly to implement and maintain,
requiring significant upfront investment in hardware, infrastructure, and IT

On the other hand, cloud-based ERP solutions are hosted off-site by a
third-party provider and accessed through the internet. They offer
numerous benefits such as lower initial costs, automatic updates, improved
collaboration capabilities, and easy access from anywhere with an internet
connection. However, concerns around data privacy and security may make
some companies hesitant to fully embrace cloud-based ERP.

This is where hybrid ERP solutions come in – bridging the gap between
on-premises and cloud-based systems. Hybrid ERPs combine the
functionalities of both types of systems into one integrated solution that
offers greater flexibility while mitigating risks associated with hosting
sensitive data in the cloud.

One key advantage of hybrid ERPs is their ability to manage critical
processes across multiple locations or business units.

Key considerations when choosing a Hybrid ERP Solution

When it comes to choosing an ERP solution for your business, there are
several factors that need to be carefully considered. This becomes even
more crucial when looking at hybrid ERP solutions, which combine the best of
both on-premises and cloud-based systems. In this section, we will discuss
some key considerations that should be taken into account when choosing a
hybrid ERP solution.

  1. Business Needs and Objectives:
    The first step in selecting any ERP system is to understand your business
    needs and objectives. This includes identifying the specific processes and
    workflows that need to be managed by the system, as well as any unique
    requirements or challenges faced by your organization. With a hybrid ERP
    solution, it is important to evaluate how each component (cloud-based or
    on-premises) will support these needs and align with your overall business

  2. Scalability:
    Scalability is another important factor to consider when choosing a hybrid
    ERP solution. As your business grows, you will need a system that can easily
    adapt and accommodate increased data storage, user access, and processing
    power. A hybrid approach allows for flexibility in scaling up or down based on
    current needs without significant disruptions or additional costs.

  3. Integration Capabilities:
    One of the main benefits of a hybrid ERP solution is its ability to seamlessly
    integrate both on-premises and cloud-based systems. However, not all
    solutions offer the same level of integration capabilities. It is essential to
    assess how well the different components work together and whether they
    can effectively share data across platforms

Future trends and developments in Hybrid ERP Solutions

In recent years, hybrid ERP solutions have gained significant traction in the
business world, offering a unique combination of on-premises and
cloud-based systems. This has allowed organizations to leverage the benefits
of both approaches while addressing their specific needs and requirements.
As technology continues to evolve and shape the business landscape, it is
important to understand the future trends and developments in hybrid ERP

  1. Increased Adoption Rate
    One of the most prominent future trends for hybrid ERP solutions is an
    increased adoption rate among businesses. As more organizations recognize
    the value and flexibility offered by these systems, they are likely to adopt
    them as their preferred ERP solution. According to a report by Grand View
    Research, the global market for hybrid cloud services is expected to reach
    $171.93 billion by 2024, showcasing a growing demand for such solutions.

  2. Advanced Integration Capabilities
    With the rise of interconnected technologies and processes, integration has
    become crucial for businesses looking to streamline operations across
    multiple departments and locations. Hybrid ERP solutions are expected to
    offer advanced integration capabilities that seamlessly connect on-premises
    systems with cloud-based applications. This will enable organizations to have
    a holistic view of their operations and make data-driven decisions.

  3. Focus on Data Security
    Data security remains a top concern for businesses as they move towards
    digital transformation. Hybrid ERP solutions offer enhanced security
    measures by allowing sensitive data to be stored on-premises while
    non-sensitive data can be stored in the cloud. In addition, these systems
    offer robust encryption methods and regular backups to ensure data

  4. Artificial Intelligence and Machine Learning Integration
    As AI and machine learning continue to advance, they are expected to play a
    significant role in the development of hybrid ERP solutions. These
    technologies can be integrated into these systems to automate routine
    tasks, improve decision-making processes, and provide predictive analytics.
    This will help businesses to identify patterns and trends in their data,
    leading to better-informed decisions.

  5. Mobile-First Approach
    With the increasing use of mobile devices in business operations, hybrid ERP
    solutions are likely to adopt a mobile-first approach. This will allow
    employees to access critical business information on-the-go, improving
    productivity and efficiency. Such systems will also offer responsive designs
    that adapt to different screen sizes, making it easier for users to access
    information from any device.

  6. Customization and Scalability
    Hybrid ERP solutions are known for their flexibility and scalability, allowing
    businesses to customize the system according to their specific needs. In the
    future, these systems are expected to become even more customizable, with
    an emphasis on providing tailor-made solutions for different industries and
    verticals. They will also offer robust scalability options that can
    accommodate business growth without disrupting operations.


In conclusion, Hybrid ERP Solutions emerge as a strategic imperative for
organizations navigating the ever-evolving landscape of business
technologies. The journey from traditional on-premises systems to the
dynamic realm of cloud-based platforms is no longer a binary choice but a
harmonious blend that optimizes the strengths of both approaches.

A hybrid ERP solution is essentially a combination of on-premises and
cloud-based software, allowing businesses to leverage the strengths of both
types of systems. It offers the scalability and accessibility of cloud-based
systems while retaining control over sensitive data through on-premises
deployment. This makes it an ideal choice for companies looking to bridge the
gap between traditional and modern approaches to ERP.

In essence, Hybrid ERP Solutions symbolize a marriage of tradition and
innovation, where the best of both worlds come together to empower
organizations in their quest for operational excellence. As businesses
continue to evolve, those embracing the hybrid approach position themselves
to not only survive but thrive in a digital future that demands adaptability
and resilience. The journey towards a harmonious coexistence of
on-premises and cloud-based systems is not just a technological evolution; it
is a strategic imperative for businesses striving to stay ahead in a dynamic
and competitive landscape.


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Master Subscripiton Agreement

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Master Subscription Agreement
May 5, 2021

The version of this Master Subscription Agreement in effect as of the Effective Date (defined below) (together with all exhibits, schedules, statements of work and Order Forms incorporated herein, the “Agreement”) governs customer’s (“You”, “Your” or “Customer”) access to and use of any Products (as defined below) of Silicon Valley Developers LLC, a California limited liability company (“We”, “Our” or “SVD”). By executing an Order Form that references this Agreement, or by click-accepting a link to this Agreement, You agree to the terms of this Agreement. You represent that You have the authority to bind the applicable entity on behalf of Your organization and its Affiliates. This Master Subscription Agreement is made and entered into as of the date (the “Effective Date”) of the relevant Order Form by and between SVD and the party indicated on the Order Form. Certain capitalized terms are defined in Section 1 below.

1. Definitions.
“Access Credentials” means any username, identification number, password, license or security key, security token, PIN or other security code, method, technology or device used, alone or in combination, to verify an individual’s identity and authorization to access and use the Services.

“Authorized User” means any individual who has been authorized in accordance with the terms of the Agreement to access and use the Products. “Customer Data” means, other than Resultant Data, information, data and other content, in any form or medium, that is collected, downloaded or otherwise received, directly or indirectly from Customer or an Authorized User by or through the Services.

“Customer Systems” means the Customer’s information technology infrastructure, including computers, software, hardware, databases, electronic systems (including database management systems) and networks, whether operated directly by Customer or through the use of third-party services.

“Documentation” means the documents or materials that the SVD provides or makes available to Customer at www.verticalworkflow.com and which describe the functionality, components, features or requirements of the Services or SVD Materials, including any aspect of the installation, configuration, integration, operation, use, support or maintenance thereof.

“Harmful Code” means any software, hardware or other technology, device or means, including any virus, worm, malware or other malicious computer code, the purpose or effect of which is to (a) permit unauthorized access to, or to destroy, disrupt, disable, distort, or otherwise harm or impede in any manner any (i) computer, software, firmware, hardware, system or network or (ii) any application or function of any of the foregoing or the security, integrity, confidentiality or use of any data Processed thereby, or (b) prevent Customer or any Authorized User from accessing or using the Services or SVD Systems as intended by this Agreement. Harmful Code does not include any SVD Disabling Device.

“Intellectual Property Rights” means any and all registered and unregistered rights granted, applied for or otherwise now or hereafter in existence under or related to any patent, copyright, trademark, trade secret, database protection or other intellectual property rights laws, and all similar or equivalent rights or forms of protection, in any part of the world.

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree or other requirement of any federal, state, local or foreign government or political subdivision thereof, or any arbitrator, court or tribunal of competent jurisdiction.

“Losses” means any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys’ fees and the costs of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers.

“Order Form” means a written order form referencing this Agreement by which Customer purchases any Product. “Permitted Use” means any use of the Services by an Authorized User for the benefit of Customer solely in or for Customer’s internal business operations.

“Person” means an individual, corporation, partnership, joint venture, limited liability entity, governmental authority, unincorporated organization, trust, association or other entity.

“Personal Information” means any information that, individually or in combination, does or can identify a specific individual or by or from which a specific individual may be identified, contacted or located, and includes all “Personal Data” as defined in the EU Data Protection Directive (Directive 95/46/EEC).

“Process” means to take any action or perform any operation or set of operations that the Services are capable of taking or performing on any data, information or other content, including to collect, receive, input, upload, download, record, reproduce, store, organize, compile, combine, log, catalog, cross-reference, manage, maintain, copy, adapt, alter, translate or make other derivative works or improvements, process, retrieve, output, consult, use, perform, display, disseminate, transmit, submit, post, transfer, disclose or otherwise provide or make available, or block, erase or destroy. “Processing” and “Processed” have correlative meanings.

“Products” means the Services, the Service Software and the SVD Materials and any releases, fixes, enhancements or modifications thereto.

“SVD Disabling Device” means any software, hardware or other technology, device or means (including any back door, time bomb, time out, drop dead device, software routine or other disabling device) used by SVD or its designee to disable Customer’s or any Authorized User’s access to or use of the Services automatically with the passage of time or under the positive control of SVD or its designee.

“SVD Materials” means the Service Software, Specifications, Documentation and SVD Systems and any and all other information, data, documents, materials, works and other content, devices, methods, processes, hardware, software and other technologies and inventions, including any deliverables, technical or functional descriptions, requirements, plans or reports, that are provided or used by SVD or any Subcontractor inconnection with the Services or otherwise comprise or relate to the Services or SVD Systems.

“SVD Personnel” means all individuals involved in the performance of Services as employees, agents or independent contractors of SVD or any Subcontractor.

“SVD Systems” means the information technology infrastructure used by or on behalf of SVD in performing the Services, including all computers, software, hardware, databases, electronic systems (including database management systems) and networks, whether operated directly by SVD or through the use of third-party services.

“Representatives” means, with respect to a party, that party’s and its Affiliates’ employees, officers, directors, consultants, agents, independent contractors, service providers, subcontractors and legal advisors.

“Resultant Data” means information, data and other content that is derived by or through the Services from Processing Customer Data and is sufficiently different from such Customer Data that such Customer Data cannot be reverse engineered or otherwise identified from the inspection, analysis or further Processing of such information, data or content.
“Service Software” means the SVD software application or applications and any third-party or other software, and all new versions, updates,
revisions, improvements and modifications of the foregoing, that SVD provides remote access to and use of as part of the Services.
“Specifications” means the specifications for the Services set forth in the Documentation.

“Territory” means worldwide.

“Third Party Materials” means materials and information, in any form or medium, including any open-source or other software, documents, data, content, specifications, products, equipment or components of or relating to the Services that are not proprietary to SVD.

2. Services.

2.1 Subject to and conditioned on Customer’s and its Authorized Users’ compliance with the terms and conditions of this Agreement, during the Term, SVD shall use commercially reasonable efforts to provide to Customer and its Authorized Users the Services in accordance with the Specifications and terms and conditions hereof, including to host, manage, operate and maintain the Service Software for remote electronic access and use by Customer and its Authorized Users (the “Services”) in substantial conformity with the Specifications, 24 hours per day, seven days per week every day of the year, except for: (a) Scheduled Downtime in accordance with Section 4.2; (b) Service downtime or degradation due to a Force Majeure Event; (c) any other circumstances beyond SVD’s reasonable control, including Customer’s or any Authorized User’s use of Third Party Materials, misuse of the Services, or use of the Services other than in compliance with the express terms of this Agreement and the Specifications; and (d) any suspension or termination of Customer’s or any Authorized Users’ access to or use of the Services as permitted by this Agreement.

2.2 Except as otherwise expressly provided in this Agreement, as between the parties: (a) SVD has and will retain sole control over the operation, provision, maintenance and management of the Services and SVD Materials, including the: (i) SVD Systems; (ii) location(s) where any of the Services are performed, including in the United States, in countries outside the United States, or outside the borders of the country in which Customer or the Customer Systems are located; (iii) selection, deployment, modification and replacement of the Service Software; and (iv) performance of Support Services and Service maintenance, upgrades, corrections and repairs; and (b) Customer has and will retain sole control over the operation, maintenance and management of, and all access to and use of, the Customer Systems, and sole responsibility for all access to and use of the Services and SVD Materials by any Person by or through the Customer Systems or any other means controlled by Customer or any Authorized User, including any: (i) information, instructions or materials provided by any of them to the Services or SVD; (ii) results obtained from any use of the Services or SVD Materials; and (iii) conclusions, decisions or actions based on such use. Notwithstanding anything to the contrary in this Agreement, all Services, including all Processing of Customer Data by or on behalf of SVD shall be provided solely from within, and on computers, systems, networks and other infrastructure located in, the United States.

2.3 SVD reserves the right, in its sole discretion, to make any changes to the Services and SVD Materials that it deems necessary or useful to: (a) maintain or enhance (i) the quality or delivery of SVD’s services to its customers, (ii) the competitive strength of or market for SVD’s services or (iii) the Services’ cost efficiency or performance; or (b) to comply with applicable Law. SVD may from time to time in its discretion engage third parties to perform Services (each, a “Subcontractor”).

2.4 SVD may, directly or indirectly, and by use of a SVD Disabling Device or any other lawful means, suspend, terminate or otherwise deny
Customer’s, any Authorized User’s or any other Person’s access to or use of all or any part of the Services or SVD Materials, without incurring
any resulting obligation or liability, if: (a) SVD receives a judicial or other governmental demand or order, subpoena or law enforcement request that expressly or by reasonable implication requires SVD to do so; or (b) SVD believes, in its reasonable discretion, that: (i) Customer or any Authorized User has failed to comply with, any term of this Agreement, or accessed or used the Services beyond the scope of the rights granted or for a purpose not authorized under this Agreement or in any manner that does not comply with any instruction or requirement of the Specifications; (ii) Customer or any Authorized User is, has been, or is likely to be involved in any fraudulent, misleading or unlawful activities relating to or in connection with any of the Services; or (iii) this Agreement expires or is terminated. This Section does not limit any of SVD’s other rights or remedies, whether at law, in equity or under this Agreement.

3. Authorization; Restrictions.
3.1 Subject to and conditioned on Customer’s payment of the Fees and compliance and performance in accordance with all other terms and
conditions of this Agreement, SVD hereby authorizes Customer to access and use, solely in the Territory and during the Term, the Services and
such SVD Materials as SVD may supply or make available to Customer solely for the Permitted Use by and through Authorized Users in
accordance with the conditions and limitations set forth in this Agreement. This authorization is non-exclusive and, other than as may be
expressly set forth in Section 15, non-transferable. Nothing in this Agreement grants any right, title or interest in or to (including any license
under) any Intellectual Property Rights in or relating to, the Services, SVD Materials or Third Party Materials, whether expressly, by implication,
estoppel or otherwise. All right, title and interest in and to the Services, the SVD Materials and the Third Party Materials are and will remain
with SVD and the respective rights holders in the Third Party Materials.

3.2 Customer shall not, and shall not permit any other Person to, access or use the Services or SVD Materials except as expressly permitted by this Agreement and, in the case of Third-Party Materials, the applicable third-party license agreement. For purposes of clarity and without limiting the generality of the foregoing, Customer shall not, except as this Agreement expressly permits: (a) copy, modify or create derivative works or improvements of the Services or SVD Materials; (b) rent, lease, lend, sell, sublicense, assign, distribute, publish, transfer or otherwise make available any Services or SVD Materials to any Person, including on or in connection with the internet or any time-sharing, service bureau, software as a service, cloud or other technology or service; (c) reverse engineer, disassemble, decompile, decode, adapt or otherwise attempt to derive or gain access to the source code of the Services or SVD Materials, in whole or in part; (d) bypass or breach any security device or protection used by the Services or SVD Materials or access or use the Services or SVD Materials other than by an Authorized User through the use of his or her own then valid Access Credentials; (e) input, upload, transmit or otherwise provide to or through the Services or SVD Systems, any information or materials that are unlawful or injurious, or contain, transmit or activate any Harmful Code; (f) damage, destroy, disrupt, disable, impair, interfere with or otherwise impede or harm in any manner the Services, SVD Systems or SVD’s provision of services to any third party, in whole or in part; (g) remove, delete, alter or obscure any trademarks, Specifications, Documentation, warranties or disclaimers, or any copyright, trademark, patent or other intellectual property or proprietary rights notices from any Services or SVD Materials, including any copy thereof; (h) access or use the Services or SVD Materials in any manner or for any purpose that infringes, misappropriates or otherwise violates any Intellectual Property Right or other right of any third party, or that violates any applicable Law; (i) access or use the Services or SVD Materials for purposes of competitive analysis of the Services or SVD Materials, the development, provision or use of a competing software service or product or any other purpose that is to the SVD’s detriment or commercial disadvantage; (j) access or use the Services or SVD Materials in, or in association with, the design, construction, maintenance, operation of any hazardous environments, systems or applications, any safety response systems or other safety-critical applications, or any other use or application in which the use or failure of the Services could lead to personal injury or severe physical or property damage; or (k) otherwise access or use the Services or SVD Materials beyond the scope of the authorization granted under Section 3.1.

3.3 Customer shall at all times during the Term: (a) set up, maintain and operate in good repair and in accordance with the Specifications all
Customer Systems on or through which the Services are accessed or used; (b) provide SVD Personnel with such access to Customer’s premises
and Customer Systems as is necessary for SVD to perform the Services in accordance with the Availability Requirement and Specifications; and
(c) provide all cooperation and assistance as SVD may reasonably request to enable SVD to exercise its rights and perform its obligations under and in connection with this Agreement. SVD is not responsible or liable for any delay or failure of performance caused in whole or in part by Customer’s delay in performing, or failure to perform, any of its obligations under this Agreement (each, a “Customer Failure”). If Customer becomes aware of any actual or threatened activity prohibited by Section 3.2, Customer shall, and shall cause its Authorized Users to, immediately: (a) take all reasonable and lawful measures within their respective control that are necessary to stop the activity or threatened activity and to mitigate its effects (including, where applicable, by discontinuing and preventing any unauthorized access to the Services and SVD Materials and permanently erasing from their systems and destroying any data to which any of them have gained unauthorized access); and (b) notify SVD of any such actual or threatened activity.

4. Service Levels; Support.
4.1 Subject to the terms and conditions of this Agreement, SVD will use commercially reasonable efforts to make the Services Available at least
ninety-nine and one half percent (99.5%) of the time as measured over the course of each calendar month during the Term (each such calendar month, a “Service Period”), excluding unavailability as a result of any of the Exceptions described below in this Section 4.1 (the “Availability Requirement”). “Service Level Failure” means a material failure of the Services to meet the Availability Requirement. “Available” means the Services are available for access and use by Customer and its Authorized Users over the Internet and operating in material accordance with the Specifications. For purposes of calculating the Availability Requirement, the following are “Exceptions” to the Availability Requirement, and neither the Services will be considered un-Available nor any Service Level Failure be deemed to occur in connection with any failure to meet the Availability Requirement or impaired ability of Customer or its Authorized Users to access or use the Services that is due, in whole or in part, to any: (a) act or omission by Customer or any Authorized User/access to or use of the Services by Customer or any Authorized User, or using Customer’s or an Authorized User’s Access Credentials, that does not strictly comply with this Agreement and the Specifications; (b) Customer Failure; (c) Customer’s or its Authorized User’s Internet connectivity; (d) Force Majeure Event; (e) failure, interruption, outage or other problem with any software, hardware, system, network, facility or other matter not supplied by SVD pursuant to this Agreement; (f) Scheduled Downtime; or (g) disabling, suspension or termination of the Services pursuant to Section 2.4.

4.2 In the event of a Service Level Failure, SVD shall issue a credit to Customer in the amount of up to 10% of the monthly Fees for the Services due for the Service Period the Service Level Failure occurred (each a “Service Credit”), subject to the following: (a) SVD has no obligation to issue any Service Credit unless (i) Customer reports the Service Failure to SVD immediately on becoming aware of it; and (ii) requests such Service Credit in writing within two (2) calendar days of the Service Level Failure; and (b) in no event will a Service Level Credit for any Service Period exceed 10% of the total Fees that would be payable for that Service Period if no Service Level Failure had occurred. Any Service Credit payable to Customer under this Agreement will be issued to Customer in the following the Service Period in which the Service Level Failure occurred. This Section 4.2 sets forth SVD’s sole obligation and liability and Customer’s sole remedy for any Service Level Failure.

4.3 SVD will use commercially reasonable efforts to schedule downtime for routine maintenance of the Services between the hours of 1:00 a.m. and 3:00 a.m., Pacific Time (“Scheduled Downtime”).

4.4 The Services include SVD’s standard customer support services (“Support Services”) by email, Monday through Friday 9:00 am to 5:00 pm,
excluding holidays.

4.5 The Services do not replace the need for Customer to maintain regular data backups or redundant data archives. SVD HAS NO OBLIGATION OR LIABILITY FOR ANY LOSS, ALTERATION, DESTRUCTION, DAMAGE, CORRUPTION OR RECOVERY OF CUSTOMER DATA.

5. Additional Obligations.
5.1 Customer acknowledges that the Services are not designed with security and access management for Processing the following categories of information: (a) Personal Information; (b) data that is classified and or used on the U.S. Munitions list, including software and technical data; (c) articles, services and related technical data designated as defense articles or defense services; and (d) ITAR (International Traffic in Arms
Regulations) related data, (each of the foregoing, “Prohibited Data”). Customer shall not, and shall not permit any Authorized User or other
Person to, provide any Prohibited Data to, or Process any Prohibited Data through, the Services, the SVD Systems or any SVD Personnel.
Customer is solely responsible for reviewing all Customer Data and shall ensure that no Customer Data constitutes or contains any Prohibited

5.2 Customer has and will retain sole responsibility for: (a) all Customer Data, including its content and use; (b) all information, instructions and materials provided by or on behalf of Customer or any Authorized User in connection with the Services; (c) Customer’s information technology infrastructure, including computers, software, databases, electronic systems (including database management systems) and networks, whether operated directly by Customer or through the use of third-party services (“Customer Systems”); (d) the security and use of Customer’s and its Authorized Users’ Access Credentials; and (e) all access to and use of the Services and SVD Materials directly or indirectly by or through the Customer Systems or its or its Authorized Users’ Access Credentials, with or without Customer’s knowledge or consent, including all results obtained from, and all conclusions, decisions and actions based on, such access or use.

6. Fees; Payment. Customer shall pay SVD the fees set forth and agreed to in the applicable Order Form (“Fees”) in accordance with this Section 6. SVD may increase Fees for any contract period, including any Renewal Term, by providing written notice to Customer at least 60 calendar days prior to the commencement of that contract period or such Renewal Term, as applicable, and the fees set forth and agreed to in the applicable Order Form will be deemed amended accordingly. All Fees and other amounts payable by Customer under this Agreement are exclusive of taxes and similar assessments. Customer is responsible for all sales, use and excise taxes, and any other similar taxes, duties and charges of any kind imposed by any federal, state or local governmental or regulatory authority on any amounts payable by Customer hereunder, other than any taxes imposed on SVD’s income. Customer shall pay all Fees within 30 days after the date of the invoice therefor. Customer shall make all payments hereunder in US dollars, and to such address or account as SVD may specify in writing from time to time. If Customer fails to make any payment when due then, in addition to all other remedies that may be available: (a) SVD may charge interest on the past due amount at the rate of 1.5% per month calculated daily and compounded monthly or, if lower, the highest rate permitted under applicable Law; (b) Customer shall reimburse SVD for all reasonable costs incurred by SVD in collecting any late payments or interest, including attorneys’ fees, court costs and collection agency fees; and (c) if such failure continues for 30 days following written notice thereof, SVD may suspend performance of the Services until all past due amounts and interest thereon have been paid, without incurring any obligation or liability to Customer or any other Person by reason of such suspension. All amounts payable to SVD under this Agreement shall be paid by Customer to SVD in full without any setoff, recoupment, counterclaim, deduction, debit or withholding for any reason (other than any deduction or withholding of tax as may be required by applicable Law).

7. Intellectual Property Rights.
7.1 All right, title and interest in and to the Services and SVD Materials, including all Intellectual Property Rights therein, are and will remain with SVD and the respective rights holders in the Third-Party Materials. Customer has no right, license or authorization with respect to any of the Services or SVD Materials (including Third-Party Materials) except as expressly set forth in Section 3.1 or the applicable third-party license, in each case subject to Section 3.2. All other rights in and to the Services and SVD Materials (including Third-Party Materials) are expressly reserved by SVD and the respective third-party licensors. In furtherance of the foregoing, Customer hereby unconditionally and irrevocably grants to SVD an assignment of all right, title and interest in and to the Resultant Data, including all Intellectual Property Rights relating thereto.

7.2 As between Customer and SVD, Customer is and will remain the sole and exclusive owner of all right, title and interest in and to all Customer Data, including all Intellectual Property Rights relating thereto, subject to the rights and permissions granted in this Section 7.2. Customer hereby irrevocably grants all such rights and permissions in or relating to Customer Data: (a) to SVD, its Subcontractors and the SVD Personnel as are necessary or useful to perform the Services; and (b) to SVD as are necessary or useful to enforce this Agreement and exercise its rights and perform its hereunder.

8. Confidentiality.

8.1 In connection with this Agreement each party (as the “Disclosing Party”) may disclose or make available Confidential Information to the other party (as the “Receiving Party”). Subject to Section 8.2, “Confidential Information” means information in any form or medium (whether oral, written, electronic or other) that the Disclosing Party considers confidential or proprietary, including information consisting of or relating to the Disclosing Party’s technology, trade secrets, know-how, business operations, plans, strategies, customers, and pricing, and information with respect to which the Disclosing Party has contractual or other confidentiality obligations, in each case whether or not marked, designated or otherwise identified as “confidential”. Without limiting the foregoing: all SVD Materials are the Confidential Information of SVD.

8.2 Confidential Information does not include information that the Receiving Party can demonstrate by written or other documentary records: (a) was rightfully known to the Receiving Party without restriction on use or disclosure prior to such information’s being disclosed or made available to the Receiving Party in connection with this Agreement; (b) was or becomes generally known by the public other than by the Receiving Party’s or any of its Representatives’ noncompliance with this Agreement; (c) was or is received by the Receiving Party on a non-confidential basis from a third party that was not or is not, at the time of such receipt, under any obligation to maintain its confidentiality; or (d) the Receiving Party can demonstrate by written or other documentary records was or is independently developed by the Receiving Party without reference to or use of any Confidential Information.

8.3 As a condition to being provided with any disclosure of or access to Confidential Information, the Receiving Party shall for three (3) years: (a) not access or use Confidential Information other than as necessary to exercise its rights or perform its obligations under and in accordance with this Agreement; (b) not disclose or permit access to Confidential Information other than to its Representatives who: (i) need to know such
Confidential Information for purposes of the Receiving Party’s exercise of its rights or performance of its obligations under and in accordance
with this Agreement; (ii) have been informed of the confidential nature of the Confidential Information and the Receiving Party’s obligations
under this Section; and (iii) are bound by written confidentiality and restricted use obligations at least as protective of the Confidential
Information as the terms set forth in this Section; (c) safeguard the Confidential Information from unauthorized use, access or disclosure using
at least the degree of care it uses to protect its similarly sensitive information and in no event less than a reasonable degree of care; and (d)
ensure its Representatives’ compliance with, and be responsible and liable for any of its Representatives’ non-compliance with, the terms of
this Section.

8.4 If the Receiving Party or any of its Representatives is compelled by applicable Law to disclose any Confidential Information then, to the extent permitted by applicable Law, the Receiving Party shall: (a) promptly, and prior to such disclosure, notify the Disclosing Party in writing of such requirement so that the Disclosing Party can seek a protective order or other remedy or waive its rights under Section 8.3; and (b) provide reasonable assistance to the Disclosing Party, at the Disclosing Party’s sole cost and expense, in opposing such disclosure or seeking a protective order or other limitations on disclosure. If the Disclosing Party waives compliance or, after providing the notice and assistance required under this Section 8.4, the Receiving Party remains required by Law to disclose any Confidential Information, the Receiving Party shall disclose only that portion of the Confidential Information that, on the advice of the Receiving Party’s legal counsel, the Receiving Party is legally required to disclose and, on the Disclosing Party’s request, shall use commercially reasonable efforts to obtain assurances from the applicable court or other presiding authority that such Confidential Information will be afforded confidential treatment.

9. Term and Termination.
9.1 Subject to Customer’s compliance with the terms and conditions of the Agreement, this Agreement will be in effect for as long as Customer is licensed to use any Product pursuant to an active Order Form (the “Subscription Term”). In addition to any termination rights set forth elsewhere herein, each party will have the right to terminate the Agreement if the other party breaches any material term of the Agreement and fails to cure such breach within thirty (30) days after receiving written notice thereof. Each party has the right to terminate the Agreement immediately upon notice if the other party becomes the subject of a petition in bankruptcy or similar legal proceeding arising from its insolvency, receivership or assignment for the benefit of creditors, provided that the underlying case is not dismissed within sixty (60) days. An Order Form term shall automatically be extended for consecutive additional Order Form terms of the same term as agreed in the original Order Form, unless a party delivers, at least sixty (60) days before the expiration of the Order Form term, written notice to the other party of its intent not to renew or extend the Subscription Term. Each party will have the right to terminate an individual Order Form if the other party breaches any material term of such Order Form and fails to cure such breach within thirty (30) days after written notice thereof. For the avoidance of doubt, termination of an Order Form (or any discrete Products within an Order Form) shall not affect any other Products that Customer has purchased under the same or any other Order Form(s). Upon termination of any Order Form or part thereof before end of the Subscription Term due to SVD’s uncured material breach, SVD will, within thirty (30) days of the effective date of termination, provide Customer a pro-rata refund of prepaid subscription Fees for the remainder of the Subscription Term after the effective date of termination. Upon any termination or expiration of this Agreement for any reason, all licenses granted to Customer in this Agreement and in all Order Forms will terminate immediately and: (i) Customer will immediately cease use of the Products; and (ii) Customer will provide Illumio with an officer’s written certification, certifying to Customer’s compliance with the foregoing.

9.2 The rights and obligations of SVD and Customer contained in Sections 2.4, 3.2, 3.3, 5, 6, 7, 8, 9, and 11 through 15 will survive the expiration or termination of this Agreement.

10. Representations and Warranties. Each party represents and warrants to the other party that: (a) it is duly organized, validly existing and in good standing as a corporation or other entity under the Laws of the jurisdiction of its incorporation or other organization; and (b) it has the full right, power and authority to enter into and perform its obligations and grant the rights, licenses, consents and authorizations it grants or is required to grant under this Agreement. SVD represents, warrants and covenants to Customer that SVD will perform the Services using personnel of required skill, experience and qualifications and in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and will devote adequate resources to meet its obligations under this Agreement. Customer represents, warrants and covenants to SVD that Customer owns or otherwise has and will have the necessary rights and consents in and relating to the Customer Data so that, as received by SVD and Processed in accordance with this Agreement, they do not and will not infringe, misappropriate or otherwise violate any Intellectual Property Rights, or any privacy or other rights of any third party or violate any applicable Law.


12. Indemnification.
12.1 SVD shall indemnify, defend and hold harmless Customer from and against any and all Losses incurred by Customer arising out of or relating to any claim, suit, action or proceeding (each, an “Action”) by a third party (other than an Affiliate of Customer) to the extent that such Losses arise from any allegation in such Action that Customer’s use of the Services (excluding Customer Data and Third Party Materials) in compliance with this Agreement (including the Specifications) infringes a U.S. Intellectual Property Right. The foregoing obligation does not apply to any Action or Losses arising out of or relating to any: (a) access to or use of the Services or SVD Materials in combination with any hardware, system, software, network or other materials or service not provided or authorized in the Specifications or otherwise in writing by SVD; (b) modification of the Services or SVD Materials other than: (i) by or on behalf of SVD; or (ii) with SVD’s written approval in accordance with the Specifications; (c) failure to timely implement any modifications, upgrades, replacements or enhancements made available to Customer by or on behalf of SVD; or (d) act, omission or other matter described in Section 12.2, whether or not the same results in any Action against or Losses by any SVD Indemnitee.

12.2 Customer shall indemnify, defend and hold harmless SVD and its Subcontractors and Affiliates, and each of its and their respective officers, directors, employees, agents, successors and assigns (each, a “SVD Indemnitee”) from and against any and all Losses incurred by such SVD Indemnitee in connection with any Action by a third party (other than an Affiliate of a SVD Indemnitee) that arises out of or relates to any: (a) Customer Data, including any Processing of Customer Data by or on behalf of SVD in accordance with this Agreement; (b) any other materials or information (including any documents, data, specifications, software, content or technology) provided by or on behalf of Customer or any Authorized User, including SVD’s compliance with any specifications or directions provided by or on behalf of Customer or any Authorized User to the extent prepared without any contribution by SVD; (c) allegation of facts that, if true, would constitute Customer’s breach of any of its representations, warranties, covenants or obligations under this Agreement; or (d) negligence/gross negligence or more culpable act or omission (including recklessness or willful misconduct) by Customer, any Authorized User, or any third party on behalf of Customer or any Authorized User, in connection with this Agreement.

12.3 Each party shall promptly notify the other party in writing of any Action for which such party believes it is entitled to be indemnified pursuant to Section 12.1 or Section 12.2, as the case may be. The party seeking indemnification (the “Indemnitee”) shall cooperate with the other party (the “Indemnitor”) at the Indemnitor’s sole cost and expense. The Indemnitor shall immediately take control of the defense and investigation of such Action and shall employ counsel reasonably acceptable to the Indemnitee to handle and defend the same, at the Indemnitor’s sole cost and expense. The Indemnitee’s failure to perform any obligations under this Section 12.3 will not relieve the Indemnitor of its obligations under this Section 12 except to the extent that the Indemnitor can demonstrate that it has been materially prejudiced as a result of such failure. The Indemnitee may participate in and observe the proceedings at its own cost and expense with counsel of its own choosing.

12.4 If any of the Services or SVD Materials are, or in SVD’s opinion are likely to be, claimed to infringe, misappropriate or otherwise violate any third-party Intellectual Property Right, or if Customer’s or any Authorized User’s use of the Services or SVD Materials is enjoined or threatened to be enjoined, SVD may, at its option and sole cost and expense: (a) obtain the right for Customer to continue to use the Services and SVD Materials materially as contemplated by this Agreement; (b) modify or replace the Services and SVD Materials, in whole or in part, to seek to make the Services and SVD Materials (as so modified or replaced) non-infringing, while providing materially equivalent features and
functionality, in which case such modifications or replacements will constitute Services and SVD Materials, as applicable, under this Agreement; or (c) by written notice to Customer, terminate this Agreement with respect to all or part of the Services and SVD Materials, and require Customer to immediately cease any use of the Services and SVD Materials or any specified part or feature thereof.


13. Limitations of Liability.


14. Force Majeure. In no event will SVD be liable or responsible to Customer, or be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any payment obligation), when and to the extent such failure or delay is caused by any circumstances beyond SVD’s reasonable control (a “Force Majeure Event”), including acts of God, flood, fire, earthquake or explosion, war, terrorism, invasion, riot or other civil unrest, embargoes or blockades in effect on or after the date of this Agreement, national or regional emergency, strikes, labor stoppages or slowdowns or other industrial disturbances, passage of Law or any action taken by a governmental or public authority, including imposing an embargo, export or import restriction, quota or other restriction or prohibition or any complete or partial government shutdown, or national or regional shortage of adequate power or telecommunications or transportation. Either party may terminate this Agreement if a Force Majeure Event continues substantially uninterrupted for a period of 30 days or more. In the event of any failure or delay caused by a Force Majeure Event, SVD shall give prompt written notice to Customer stating the period of time the occurrence is expected to continue and use commercially reasonable efforts to end the failure or delay and minimize the effects of such Force Majeure Event.

15. Miscellaneous. Upon a party’s reasonable request, the other party shall, at the requesting party’s sole cost and expense, execute and deliver all such documents and instruments, and take all such further actions, necessary to give full effect to this Agreement. The relationship between the parties is that of independent contractors. Nothing contained in this Agreement shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever. Neither party shall issue or release any announcement, statement, press release or other publicity or marketing materials relating to this Agreement or otherwise use the other party’s trademarks, service marks, trade names, logos, domain names or other indicia of source, affiliation or sponsorship, in each case, without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed, provided, however, that SVD may, without Customer’s consent, include Customer’s name and/or other indicia in its lists of SVD’s current or former customers of SVD in promotional and marketing materials. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement. The Agreement any other documents incorporated herein by reference constitutes the sole and entire agreement of the parties with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. Customer shall not assign or otherwise transfer any of its rights, or delegate or otherwise transfer any of its obligations or performance, under this Agreement, in each case whether voluntarily, involuntarily, by operation of law or otherwise, without SVD’s prior written consent. For purposes of the preceding sentence, and without limiting its generality, any merger, consolidation or reorganization involving Customer (regardless of whether Customer is a surviving or disappearing entity) will be deemed to be a transfer of rights, obligations or performance under this Agreement for which SVD’s prior written consent is required. No delegation or other transfer will relieve Customer of any of its obligations or performance under this
Agreement. Any purported assignment, delegation or transfer in violation of this Section is void. This Agreement is binding upon and inures to the benefit of the parties hereto and their respective permitted successors and assigns. This Agreement is for the sole benefit of the parties hereto and their respective permitted successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. No amendment to or modification of or rescission, termination or discharge of this Agreement is effective unless it is in writing, identified as an amendment to or rescission, termination or discharge of this Agreement and signed by an authorized representative of each party. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. If any provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. This Agreement is governed by and construed in accordance with the internal laws of the State of California without giving effect to any choice or conflict of law provision or rule that would require or permit the application of the laws of any jurisdiction other than those of the State of California. Any legal suit, action or proceeding arising out of or related to this Agreement or the licenses granted hereunder shall be instituted exclusively in the federal courts of the United States or the courts of the State of California in each case located in the city of San Jose and County of Santa Clara, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. Each party acknowledges and agrees that a breach or threatened breach by such party of any of its obligations under Section 8 or, in the case of Customer, Section 3.2, Section 3.3 or Section 5.1, would cause the other party irreparable harm for
which monetary damages would not be an adequate remedy and agrees that, in the event of such breach or threatened breach, the other party will be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from any court, without any requirement to post a bond or other security, or to prove actual damages or that monetary damages are not an adequate remedy. Such remedies are not exclusive and are in addition to all other remedies that may be available at law, in equity or otherwise.