In what has been described by many as an industry gold-rush, many traditional ‘Hosting’ or ‘Telecoms’ providers have expanded their service offerings to encompass Cloud Computing. At Beeches Consulting we have seen this new world for Cloud service providers cause monumental commercial, contractual and service management difficulties for both suppliers and clients alike.
Clients are often expected by these suppliers to sign ‘tear off’ standard contracts with little recognition of the subtle, but hugely important, differences associated with this model of business (as opposed to the business model that these new suppliers were historically used to delivering against). Indeed, under normal circumstances, an experienced technology outsourcer would never entertain the types of terms and conditions under which some Cloud suppliers seemingly expect a client to simply sign up to.
Moving critical IT systems to a Cloud supplier needs, as an absolute minimum, the same due care and attention that any external IT contract needs. In the quest for increasing resilience and reducing costs, roles, responsibilities and contractual commitments in the event of Cloud failures (they do fail whatever they tell you!) are of immense importance. So thinking about areas such as guaranteed service level commitments, service credits, liquidated damages, consequential losses and exit arrangements at the end of the term or in the event of difficulties are just a few of the areas that must be considered.
At Beeches Consulting, we advise clients on how to get a Cloud contract right for your business. We also assist suppliers that are growing their service offering into the wider outsourcing arena, on how to cope with this ‘step up’ from both a contractual and selling perspective.