Cloud contracts have become notorious for their unfair and non-negotiable terms which often leave companies tied into deals that don’t fully meet their business needs.
The latest research from the Queen Mary University of London has revealed that a high proportion of Cloud Computing contracts contain clauses that could leave customers liable for failures by their provider.
As Cloud Computing continues to grow, the naivety of those opting to tie themselves into the aforementioned contracts remains present. Generally speaking, the final decision will fall to the IT Director or MD, so with so much at stake, it needs to be questioned as to why so many are signing up to agreements without fully understanding the terms and associated implications should the supplier fail to deliver.
You would consider it somewhat careless to take out a mortgage or buy a new car without fully understanding the extent of the contract – so why are so many companies choosing to outsource their entire IT estate without fully understanding the terms and conditions? Business would dictate a buyer beware attitude when it comes to purchasing anything and this mentality needs to be adopted when it comes to the cloud.
It is vital that a company looks at its business needs, ascertains what is considered mission critical, and signs a contract that has the SLAs in place to deliver upon those needs. It is far too simple in the first instance to glance over a contract and assume it matches your criteria, but in reality, the first draft will usually fall in favour of the proposer. Whilst you may resent the initial cost of employing a lawyer, in the long run seeking professional advice will prove invaluable in comparison to being tied into a non-negotiable and costly contract.
Signing a contract you don’t fully understand for something as critical as outsourcing your IT could be suicidal. What is worse, is not being entitled to any form of financial rebate should your provider fail to deliver upon your agreed SLAs. It is crucial that you invest in a provider who has the financial backing for pay-outs. Whilst smaller companies may offer you the most negotiable contract around, without the financial backing, should anything go wrong, negotiations become worthless.
It is therefore of critical importance that the end-user fully understands that what the agreed SLAs look like they mean, can be very different to what they actually mean. So beware, and make sure you fully understand the terms before signing on the dotted line.
Consider some real world problem scenarios before signing the contract. Establish what is mission critical to your business and include set agreements to ensure your company will be fully protected both technically and financially should anything go wrong with these “business life threatening” eventualities.
But that wasn’t in the contract
Blame can so easily be placed on the service provider – all too common is the phrase ‘but that wasn’t in the contract’. The reality is however, that a new contract works both ways. Whilst the customer may be paying the monthly fees, a provider will often need to acquire extra equipment and rack space to ensure they too can meet the demands of the contract.
Whilst you can reasonably consider this is all part of the service, don’t forget that the provider will expect a certain level of commitment from you in return. Cloud suppliers are therefore perfectly within their right to expect compensation should you wish to terminate the contract early based upon the financial commitments they have made on your behalf.
All my eggs in one basket
Finally, if you still have concerns about the risk of Cloud computing, opt for a hybrid cloud. To ensure business critical hardware is never in jeopardy, some suppliers are now able to provide a combination of public and private clouds from more than one provider to guarantee the best and least risk service.
Bear in the mind that the chances of suffering significant disruption and downtime when utilising the services of several suppliers is reduced, conversely the chances of connectivity issues increases. So placing business-critical hardware into a private Cloud with tight SLAs makes good business sense and in that vein, placing less critical hardware which is less sensitive to suffering downtime in the public Cloud makes financial sense.
It comes down to determining balance of risk. Define what is considered imperative for your business to function, place that in a secure and trusted contract, pay the associated cost and have the reassurance that your business is in safe hands.
The move to the Cloud can and should deliver considerable cost savings. If you are in a situation where you can afford to have multiple providers then it does undoubtedly offer a certain level of comfort – bear in mind however that 90% of outsourced IT will need to interconnect and this will be affected should your IT estate lie with various suppliers.
The risks to customers’ data can at least be mitigated through back-ups. In short, it is crucial to have multiples of everything. Having multiple providers but relying solely on one telecoms line will prove a waste of time should that line be cut. By having back-up ADSL and lease lines you can ensure your IT infrastructure is secure and accessible.
In short, when it comes to Cloud Computing remember, your connection to the Cloud is just as crucial as the contract that holds you there. Firstly ascertain your business needs, agree to a contract that meets those needs and ensure you 100% understand the contract ahead of signing.