4 things to consider before signing that cloud contract

Whether you’re definitely on board with cloud-computing or not, you’re most likely familiar with the basic concerns of it: data security, privacy, accessibility, etc. But here’s four aspects you may not have thought about.

Most risks in cloud computing are concentrated on the software, rather than platform and infrastructure. But addressing the latter two with a vendor are just as important as addressing software risks because, at the end of the day, your company is completely dependent on the vendor for these operational measures.

Rob Livingstone, author of “Navigating Through the Cloud,” lists important things to keep in mind before you sign on the dotted line with your cloud provider.

Integration

According to an IT research study, firms should be budgeting for integration expenses, since integrating your cloud-computing system with your established system isn’t just like flipping a light switch. Things will quickly get complex. As far as how much to budget, the study suggests 10-50% of the cost of the intial purchase and implementation.

But make sure you talk with your vendor about integration, and ask this question: “What’s in the contract that ensures you’ll assist us in the integration of your service with our system?” If they don’t have a good answer, keep shopping.

What if?

If this cloud service is absolutely vital to your operations than you need to have a back-up plan. Depending on how your vendor has designed its system, it may not be possible for it to have a third party protect its software code (a “software escrow”).

That means you need to be asking this question: “In the event that your company has a failure of service, bankruptcy, a lawsuit resulting in suspension of your service, etc. … how is my business protected?” No good answer? Look elsewhere.

Termination of contract

With “what-if” scenarios in mind, here’s another: What if your vendor is acquired by another company? And what if that company decides to change the terms of the contract?

It’s certainly not something one anticipates, but anything’s possible. You should be asking: “What are my rights regarding termination of service and will I be able to my move my data to another provider in such a case?”

Always be compatible?

An advantage of cloud-based systems is that upgrades happen over the web automatically. However, this can mean that vendors will drop features that aren’t in their best interest.

And if your vendor’s software stops being compatible with your system, your business will need a workaround: Either write your own integration software or look for yet another provider. Both are costly measures.

Instead, ask this question: “What commitment can I get from you that my system will always be supported by your software?”

What’s your experience been when shopping for cloud computing vendors? Are they addressing these issues? Let us know in the comments below.