Cloud Contracts: 8 Questions To Ask - InformationWeek

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6/19/2014
10:49 AM
Charles Babcock
Charles Babcock
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Cloud Contracts: 8 Questions To Ask

What should you look for in a cloud contract? What's hiding in cloud providers' service-level agreements and terms? Read our expert guide.
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What's the penalty for dipping below the SLA?
What's the consequence for downtime that exceeds the contractual limit? This is one of the biggest gotchas in cloud contracts. Amazon Web Services pays for downtime by granting customers a repayment credit for the time lost. But what if your website is down for four hours and 39 minutes during the holiday buying season? What's the lost business worth? An Amazon credit won't begin to cover the real cost of the downtime. NetSuite has a higher standard if it crosses the outage limit. It grants a month's free service to compensate. There's still no compensation for the loss of reputation and business, but better a 30-day repayment versus a simple swap of replacement credit for the downtime.
(Source: Public Domain Pictures on Pixabay.)

What's the penalty for dipping below the SLA?
What's the consequence for downtime that exceeds the contractual limit? This is one of the biggest gotchas in cloud contracts. Amazon Web Services pays for downtime by granting customers a repayment credit for the time lost. But what if your website is down for four hours and 39 minutes during the holiday buying season? What's the lost business worth? An Amazon credit won't begin to cover the real cost of the downtime. NetSuite has a higher standard if it crosses the outage limit. It grants a month's free service to compensate. There's still no compensation for the loss of reputation and business, but better a 30-day repayment versus a simple swap of replacement credit for the downtime.

(Source: Public Domain Pictures on Pixabay.)

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Charlie Babcock
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Charlie Babcock,
User Rank: Author
6/20/2014 | 2:23:28 PM
What is a "commercially reasonable" commitment?
The organization and presentation of cloud services varies a great deal by vendor; the contracts, on the other hand, show many marks of similarity. Repeatedly encountered the phrase, "commercially reasonable effort." To me, ikt's come to mean "will meet the same low standard as everybody else."
ppetrasko549
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ppetrasko549,
User Rank: Apprentice
6/20/2014 | 1:24:40 PM
Cloud security
SAS70 Type 2 audits were not designed to provide assurance about IT security and practices.  SAS70's have been superseded by SSAE16 SOC2's which are designed to provide assurance about IT security and practices.
Laurianne
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Laurianne,
User Rank: Author
6/19/2014 | 11:47:17 AM
Good advice
Thanks for sharing your insights on these contracts, Charlie. The current difficulties involved in apples-to-apples pricing comparison = one pain point I hear a lot about from IT leaders.
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