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Top 5 tips on navigating a cloud contract

Sign for cloud service functionality, not just a billowing brand name

In signing up to a cloud service keep focus on: what you aim to achieve - the contract description the software - protecting your data - the details
In signing up to a cloud service keep focus on: what you aim to achieve - the contract description the software - protecting your data - the details

Cloud services can be a wonderful thing – cumbersome processes and data transfers can disappear from local servers, information can be better co-ordinated, and users can benefit from greater connectivity.

However, for every silver lining there is a darkside to the cloud, and one area to watch is the wording of the contract with your cloud provider. CW provides the top 5 tips for navigating your cloud contract:

1. Test the cloud service you are interested in

Before buying any product you want to see it in action - to test it and evaluate it, right?

The same holds true for a cloud computing service – get to know how it works before and not after, or it could be your loss.

Know for sure what you want the service to accomplish and what you can expect it to do.

2. Read the contract description of the cloud service

Your cloud-computing contract should specify what you expect the vendor to do, not just the brand name of its cloud service.

Surprisingly, many contracts do just this - simply stating the cloud service's name without specifying what that service is supposed to do. This is inadequate.

A well-formed contract will describe the results you expect the service to achieve for you.

If not, you will have no recourse if the vendor repositions that service so that its functionality changes.

3. Don’t assume that all updates will be to your benefit

One commonly-touted benefit of cloud computing is that the services automatically update so that you're always using the current version and functionality.

It’s great if your IT staff don’t need to continually patch the software you’re running, but watch out for standard cloud-vendor contract clauses regarding updates that may say things like:

"We may change, discontinue or depreciate any element of the service, or change or remove features or functionality of the service from time to time. We will notify you of any material change to or discontinuation of the service offerings."

A cloud contract should include language regarding your rights to decline an update if possible, or at least require the vendor to provide a notice period prior to changing any functionality of its service.

This notification period should be in line with the time that it would take your company to move to another service provider if necessary – otherwise you could end up being forced by the vendor to pay additional charges.

4. Make sure your cloud contract protects your data

Once your data and processes have moved to the cloud, you become more dependent upon the provider - a situation that increases the leverage of the cloud provider over you in negotiating contract terms.

To mitigate the risk of vendor lock-in, you need to plan in advance for the eventuality that you may decide to switch to a different provider or bring your data and processes back in-house.

Your contract should describe:

  • How and when your data will be returned upon contract termination, and how long access will last for
  • Which format your data will be returned in, i.e. not proprietary or otherwise inaccessible
  • How much it will cost, if anything, for the provider to export your data
  • When your data will be destroyed, and how this process will be documented for the purpose of auditing

5. Check all the details about support and storage fees

Additional elements that can be easily overlooked when negotiating a cloud contract include:

Technical Access Requirements - how will your users access the cloud computing services?

Have you standardized the product on a particular Web browser or mobile device? If so, you will need to contractually obligate the vendor to continue to provide this specific channel of access, or notice.

Technical Support - the level of support to be provided, including the skill, the experience, the geographic location and the primary language of support personnel.

Storage limits and fees - not everything you need will necessarily be included in the base price.

Some vendors may try to place a cap on how much data you can store, with additional fees for any excess use – ensure that the contract obliges sufficient storage to be included in your base fee, or negotiate set pricing on a cost- plus model for any additional storage that may become necessary.
 

 

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