Get Your Business's Head Out of the Clouds
Cloud computing, using the internet to access IT products and services such as storage of data and software, is one of the big IT buzz words. On the face of it, it's a great opportunity to reduce overheads. However, the concept has been around for at least a decade, having different names such as ‘Application Service Provider’. So, if it's so good, why hasn't it taken off and what should a business be aware of before it takes that leap into the cloud?
Possession is nine-tenths of the law
- The cloud computing model has an overriding theme – one of trust. As a business, do you trust your supplier to hold your data, and to provide a reliable service? The issue of availability adds 'unknowns' to the equation – can the business rely on its internet connection, and the cloud computing service to work 100% at all times? It is essential to make sure there is an availability standard in the provider's contract against which service can be benchmarked and the remedies for failure provided for.
- You are also trusting a provider to keep your data confidential. Can you ensure that unauthorised people will not access it across the ether? If you terminate your contract, what happens to that data? There should be procedures to ensure data no longer exists in the cloud once your relationship ends.
- One thing to also bear in mind is that your provider may subcontract out work. Data protection laws differ between countries. You must ensure that all subcontractors adhere to the law in the country in which you have signed a contract with your service provider. You need to know what to expect and make sure you don't breach your own confidentiality obligations to third parties.
Costly upgrades
- Other considerations are the service provider's penchant for upgrades. If they upgrade, what happens if your system is not longer compatible? Does the contract state that they will pay for any necessary upgrades to your system to remain compatible with theirs? Or could you be landed with a big bill to continue accessing your own data and business systems? Challenge small print which leaves their liability limited and yours great.
- If the service provider should merge or is acquired – make sure your contract provides for this scenario or the new service provider may not agree to your existing terms, leaving you in the lurch.
Business as usual
- While cloud computing has a huge number of benefits, it might require a business to put all its eggs in one basket. This involves risk. Asking for your provider's financial details is imperative. If they become bankrupt, make sure there is provision in place for your business continuity, as this could have a significant impact on your business's survival.
- Likewise, if you run into a dispute with your provider, then you should ensure that procedures are contractually agreed at the start to deal with this effectively and protect your business. In these circumstances if your provider pulls the plug it could have dire consequences for your business.
- For many businesses, cloud computing is the next obvious step. However, it's imperative to ensure you have any potential pitfalls covered from the outset by having agreements and procedures in place.
- In cloud computing you are putting the life blood of your business into a third party's hands, so make sure you take advice on contract negotiations and the associated terms and conditions. Whatever happens, if you know that your business operations can proceed without interruption, it might just be time to start thinking about whether getting your business's head in the clouds makes sense.
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