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Cloud Contracts — The Devil is in the Detail

Published on Jun 14, 2012 at 5:56 pm in Tech Trends.

IT World recently touched on a cloud computing topic that we believe doesn’t get enough attention within broader cloud conversations. The article titled, “Cloud contracts — the Devil is in the detail,” noted that most previous conversations have focused on the types of cloud services, SaaS, PaaS or IaaS, with “very little emphasis or discussion…undertaken about the major vehicle through which these models and services will be utilized and consumed—cloud contracts.”

The article keyed in on contract issues such as service levels, data security, data leakage, data access, scalability and compliance, and urged technologists, not just accounting and legal teams, to take a close look at cloud contracts before signing on the dotted line.

We’ve talked before about the significant benefit (and risk) of taking on cloud contracts within your organization. The benefits to cloud computing include:

  • The speed and ease of deployment, reduced implementation costs and internal infrastructure needs of SaaS.
  • PaaS are incredibly scalable and reliable. PaaS also remove the fixed cost of buying initial hardware and software.
  • The ability to scale, low upfront costs and billing based on usage rather than a monthly rate of IaaS.

Perhaps the most troubling risk associated with cloud services is the never-look-back environment it can create for businesses. For example, picking a SaaS provider can lead you uncomfortably through a one-way door. Once you commit to a provider and its line of business applications, it can be hard to leave unless you preplanned your exit strategy.

PaaS is also a one-way deal. A developer must be comfortable working within the confines of the provider’s environment, because to leave the confines is to leave the cloud, and then the proverbial bottom falls out.

The IT World article points out some alarming considerations within the contracts of some the most popular cloud service providers. So before you jump into a cloud contract make sure you read the fine print.