As Cloud Computing gains momentum, more CIOs are starting to think about how to avoid becoming as locked into their cloud service providers as they are, or were, to the previous generation of vendors. Is it a marriage of convenience or a life-long commitment? As in marriage, a pre-nuptial agreement may be more useful than an SLA.
Cloud Computing creates new 'Plan B' logic
It used to be that a decision to use a major software product or managed service was, in practice, a long-term commitment. Customised functionality, proprietary architectures, hard-wired integration, and weighty contracts created significant transaction costs. In theory enterprises could change vendors, or at least threaten to do so at contract negotiation time, but both sides knew that this was a painful and expensive process. Neither party seriously entertained a 'Plan B' unless their differences were irreconcilable, and certainly the vendors knew that most enterprises had no Plan B even if they boasted otherwise.
The CIO of the Commonwealth Bank of Australia, Michael Harte, has been vocal in the media about the opportunity for cloud computing to rebalance the power relationship between enterprises and their IT vendors.
These days Cloud Computing is introducing the possibility of more casual, pay-as-you-go, IT sourcing relationships. Buying a new application or infrastructure service is relatively quick and easy, and if it doesn't work out you just walk away, right? Indeed Cloud Computing also makes it easier to have multiple service providers for different application and infrastructure services for backup and disaster recovery purposes.
The commodity nature of some IaaS and SaaS categories means that it is easier than ever before to create a real Plan B - a tested and costed arrangement to transition from one Cloud service to another. 'Plan B logic' should be an essential element of the procurement process for Cloud services and, to the extent that this gives CIOs new flexibility, it may become a significant benefit of Cloud Computing versus traditional sourcing arrangements.
Cloudy pre-nups are all about data
As in marriage, pre-nups are all about protecting your most valuable assets - which in the case of enterprises is the data. A precursor of entering into any new cloud computing relationship must be contractual and practical clarity about who owns the data, where it is stored, and how you can get it back. Think in terms of a data pre-nup for the Cloud.
This is not necessarily the same as a traditional approach to agreeing an SLA - a data pre-nup is more about practical forward thinking about how a cloud relationship will be safely terminated rather than trying to contract its success.
The immaturity of many cloud services means that SLAs are aspirational - nice to have for sure, but of little practical use if a Cloud service fails to deliver or just fails altogether. A poor performing public cloud service leaves all its customers high and dry irrespective of SLAs. Private Clouds will afford more contractual assurance, but the economic essence of Cloud services is shared rather than dedicated resources, so some risk is part of the trade-off between on-premise and Cloud.
With a good data pre-nup, enterprise CIOs can sign up to a cloud service knowing that they have an exit strategy. This can be turned into a viable Plan B by ensuring that data is never locked in to one cloud provider and by making the design of migration of the service from one cloud to another an explicit step in the procurement process.
Next time the relationship with one of your IT services providers is on the rocks - or the account manager arrives to discuss the 15% increase in service fees - wouldn't it be good to actually have a tested Plan B, and the confidence to execute it?
Steve Hodgkinson is an analyst with research house Ovum.
Post new Comment