Cloud Contract: What To Look Out For
If your company has not yet signed a cloud computing contract, chances are you are considering one sometime in the near future. Look at are lists of warning signs to be aware of.
Few IT companies have the resources or expertise to host their cloud in-house, so contracting a reputable vendor to outsource their cloud can make sense both financially and efficiency-wise.
Big Names, Big Concerns
If you’re at this stage, it’s important to know that not all cloud arrangements are created equal. While there are a slew of recognizable company names like Amazon and Microsoft in the cloud business, you need to pay attention to the fine print of the offering you are signing if you want to be sure it’s best for your company.
After all, you may have non-negotiable requirements like security or scalability that your chosen provider might not accommodate, so this is a case where you might want to “shop around” a fair bit to avoid any nasty surprises later. A cloud computing arrangement, after all, is not a one-time purchase but rather, an investment.
Comparison Shopping
But according to recent research, this is not something that many companies do. As CIO recently reported: “A recent study by IT industry association CompTIA found that even though many organizations are concerned about the security of their data in the cloud, a minority of companies perform a comprehensive review of their cloud service providers before sealing the deal.” The report states only 29% of surveyed companies engaging in a comprehensive review of a provider’s policies before an agreement was signed.
Don’t be like one of the third of companies that avoids this important step. Here is a look at some of the main points of any cloud computing agreement that you should be looking out for:
Who will be liable in the event of damage or interruptions in service?
Even a small interruption in service can be a big deal for a small company that keeps data in the cloud. If it comes at a crucial moment—and your company loses business as a result—you may want to know if your cloud provider will provide reimbursement or damages. In many cases, they do not, as liability is generally not on the provider’s side, so you want to check you know your rights before this happens.
Where is your data physically being stored?
Though we call it “the cloud” your data has to be sitting on a physical server somewhere. If you’re in the EU, law dictates that those servers must be within the EU zone, though this can be tough. One study found that “Verifying that data are actually processed in the data centers claimed by providers is difficult, technically.”
Who owns intellectual property?
While you may assume the data from your company is categorically yours, that’s not always the case. Check the fine print to see exactly where the line is drawn, as some “providers’ terms may specify they own deliverables, for example documentation.”
Can your service be terminated?
Service termination, for whatever reason, can be catastrophic if it comes unexpectedly. Make sure you understand what grounds for termination are, including things like late payment or violation of contract or third party complaints. If you don’t know the grounds for this, you could unexpectedly find yourself without service on zero notice.
Can you exit the agreement?
Termination on your end can be more complex than you realize, as providers tend to want their customers to sign a long-term contract up front. If there is a chance you think you might have to change providers down the line, make sure you know if that’s possible too. Otherwise, you could find yourself stuck in a contract that no longer serves your needs.