There continues to be a need for transparency in cloud contracts if channel suppliers and customers are going to make the migration to the cloud without running into complications and arguments over what is delivered.
Responding to the ongoing need for greater transparency in the market, and as a reaction to recent moves made by the European Commission to establish and expert team to establish cloud contract terms, Peter Groucutt, managing director of Databarracks has urged channel providers to improve the clarity they offer customers.
“Despite the widespread adoption of cloud computing, it is fair to say that the industry is still in a state of relative immaturity and as a result is prone to manipulation, particularly at SME level. Unlike enterprise level firms, SMEs rarely have the legal clout to negotiate contracts and ensure that they are getting the best possible service. Many are often left with a take-it or leave-it scenario from providers," said Groucutt.
“In addition, unrealistic SLAs often leave end-users exposed to a complex and uncertain legal framework with extensive disclaimers, which they simply do not have the experience or confidence to manage. Whilst a rigid template for contracts is not going to work for the industry because of the huge variation in technology and services, a more standardised approach to contracts will make huge strides in improving confidence, clarity and transparency," he added.
The Cloud Industry Forum (CIF) has been pushing for more transparency for the last couple of years, urging service providers to be honest with customers about what they can deliver, and how the migration to a hosted environment will work.
Frank Jennings, partner at DMH Stallard LLP and member of the Cloud Industry Legal Forum (CILF), said that even with the work of the European Commission there needed to be some degree of flexibility for the channel.
“The European Commission has stated that the Group’s recommendations will be optional, and it’s important that they stay that way. Imposing mandatory contract terms on cloud suppliers will likely stifle innovation. Rather, we would prefer to see greater commitment on behalf of CSPs to industry best practice schemes which ensure transparency, such as CIF’s Code of Practice, and improved education for end users on what a good cloud contract looks like," he said.