4 Must-Have Elements in a Cloud Contract
According to the Forrester Research, cloud is projected to reach $178 billion in 2018. This means that companies are investing heavily that include contracts with cloud providers. CoreIT advises many enterprises about the following 4 major factors that they must look while signing a contract with a provider to make the right investment on future technologies.
1. Data Egress Terms and Conditions must be Clearly Specified:
Data always has a cost. The terms and conditions of data often include commitment from vendor to assist in extracting and pre formatting of data that will be useable for future purposes. Although this is a chargeable feature, negotiating this clause at the beginning of the contract is very useful to understand where a provider usually stands and must be documented into the contract.
2. Early Termination Fees:
Every contract has this clause as it is a necessary part of the contract as the cloud provider remains protected to market changes since no provider wants to lose a paying customer. Most cloud contracts have hefty penalty fees to discourage a client from leaving. That being said one can and must ensure that the penalties are reasonableor eliminated if there is a lapse in service level agreement so that inevent of a service level agreement default, elimination of any fees or penalties can be paid by the provider.
3. Security and Audits
A contract must state detailed audits of the datacenters, tests, tools and other items important to business. The contract must also state that the enterprise has the right to perform periodic audits of the cloud provider and their operations and certifications such as SAS70, PCI, etc. must be valid and current.
4. Shop Around
Some enterprises just ask for a rate to make a comparison but never go beyond that. Shopping around a bit helps to know the difference in technology and pricing. Also it helps to make smart decisions while negotiating a contract too.