How to Avoid Cloud Contract Disasters


A bad cloud contract can devastate any business, and a recent article “8 sure-fire ways to screw up a cloud contract” should be a wake-up call, but unfortunately many businesses learn the hard way. By way of example, a recent cloud contract that I negotiated contained no provisions for Service Levels (SLA) or data backup.

Computerworld’s November 19, 2013 article included these 8 things business can do to guarantee bad cloud contracts:

  1. Pay for all of your cloud services up front
  2. Sign a long-term contract without negotiating service-level commitments and penalties for noncompliance
  3. Don’t vet the contract for hidden charges that might come back to bite you
  4. Sign off on the contract before shopping around for better terms
  5. Don’t worry about how multiple SLAs will affect the end-to-end performance of your business processes
  6. Let the salesperson talk you into adding services that you’re not ready to use
  7. Keep your on-premises systems running in parallel with the new cloud service
  8. Don’t negotiate a volume pricing agreement that accommodates the best- and worst-case changes in your seat count

Of course, using a lawyer who knows and understands cloud services is essential to any successful cloud contract.

The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.

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