The Cloud Industry Forum (CIF) has hailed the arrival of new guidelines for cloud contracts, claiming it will make life less confusing for customers.
CIF was one of five organisations – along with Atos; legal specialists Bird and Bird; the National Technical University of Athens; and the University of Piraeus in Greece – which worked on the Service Level Agreements Legal and Open Model (SLALOM) initiative, funded by the European Commission. It aims to provide frameworks for cloud contracts, to make them easier for end users to understand.
"There was no common framework or guidance around service-level agreements (SLAs), and the poor customer remained confused about it. SLAs mean lots of different things to lots of different people. Many suppliers make changes on a whim often, and there was no common ground," said Alex Hilton, CEO of CIF.
"This is a major step forward because anything that enables the channel to accelerate their capability has to be a good thing. End users in the channel now face challenges including security and data protection issues. So this is something in the kit bag that the channel can use, and say 'this work has been done for me, I need to make sure I am following it'."
Ian Moyse, sales director at Axios Systems, and cloud expert, agreed that confusion among end users is the main problem with current cloud contracts.
"The problem is whether or not the end customer is familiar enough and educated enough around cloud contracts to know what to look for," he said. "One of the challenges of that is it is a moving target, especially with the abolishment of Safe Harbour, the new Privacy Shield and the GDPR. From my experience of dealing with the average business, most customers don't have clarity or understanding around it."
Breda Beyer, business development director at CIF, said the guidelines are needed because cloud services have changed the relationship between suppliers and the customer.
"In the old on-premise world where you had your own IT kit and your own staff implementing products and services in your own environment, you knew a lot more about where stuff was and what was going on in your environment," she explained.
"When you buy cloud services, you are buying a service that you don't manage yourself; you have to take it on trust that everything is being managed. So the importance of a contract is to outline the things that you would worry about, such as data privacy."
Moyse added: "Anything that gives guidance and helps the end user know what they are getting into is good, as is anything that helps the cloud provider be more consistent with their explanations. The big challenge for an end user is, if you look at 10 contracts and they are all wildly different, you might understand the first one but you would hope the second one has some consistency in it. If it hasn't, it makes it all the harder. The simpler, more consistent and understandable we can make contracts, the faster customers will be able to adopt cloud."
SLALOM provides suppliers, resellers and end users with a free model cloud contract, which can be adapted to suit the organisations involved.
"We want to make sure the market is ready to commercialise cloud. The legal template can be used for reference if you are an end user, and if you are a supplier it can be used as a baseline," said Beyer.
IT business consultant Richard Tubb said that providers who are reselling other people's cloud services need to understand the limits of their liability and understand that the client is going to hold them accountable.
He explained: "I've come across plenty of organisations that haven't thought about the liabilities they have by offering these services. Anything that raises awareness of the need for IT companies to have these contracts in place is a good thing. That said, I think it should really come down to the IT company to do their due diligence and ask questions of the cloud vendors directly before they start reselling any services."
CIF said the frameworks aim to "lower the barriers" for smaller cloud providers by providing them with legal help that the organisations may not be able to afford otherwise.
"We think that by documenting all this and putting the baseline out there, we can help smaller organisations that don't have a room full of lawyers," explained Beyer. "It is free to use and adapt; we are not expecting people to use the contracts as they are."
Chris Dunning (pictured), chief executive of TechQuarters, said he thinks the contract templates are a good idea, but that it would still require work from the supplier and reseller before it was ready to use.
"Anything that gives you a bit of help on the legal side is a really good idea. With cloud, most people just want to buy it and consume it; it's a commodity, so you absolutely don't want to spend oodles of time writing long-winded contracts. If you want to circumvent costs that you just haven't got built into your margins for ongoing revenues, then maybe templates are a bloody good thing that you can weld into your own," he said.
"But you would still have to look at the terms in the template and get your legal team to have a look at them, to make sure they marry into your own terms and conditions. That's the problem: there will always be a bit of that if you are reselling another solution. If you are the middle man, you've still got to take your terms and conditions and weld them around the terms and conditions of the supplier."
Chief exec Jens Montanana claims Logicalis performed well despite 'currency headwinds'
All the photos from last night's event, which saw over 600 people congregate at the Hilton London Bankside
Five year deal with Essex NHS Trust will cover 400 sites, including hospitals, clinics and GP practices
18 individuals and three companies walked away as winners at CRN's inaugural Women in Channel Awards last night