While cloud technology can offer several benefits to businesses, it is not without its downsides and risks. One of the major issue is the cost involved in migrating workloads to the cloud. Of course, the cost factor is usually discussed in detail with prospective vendors before finally making a decision. But, there are several hidden costs and unexpected expenses which can appear during migration and operation in the cloud.
For companies eager to try cloud services, it’s prudent to consider the potential risks, including pricing, provider responsibility, availability, data security, customer rights, risks and penalties in choosing a cloud service provider. So, here are some useful tips you should consider when moving and negotiating with your cloud provider:
1. Include the negotiation process in the plan
The process of negotiating a contract takes time. So why not include it in your project plan? Give it the time and attention it deserves, and include it as a project milestone.
Complete our SAP x Data Natives CDO Club survey now, and help us to help you
2. Don’t pass off the negotiation process to the legal department
Is legal responsible for delivering and managing your cloud services? When negotiating with cloud vendors, make it your responsibility to be involved in all aspects of contract negotiation. Customize the contract toward protecting the value and integrity of the corporate data, and remember: final approval before execution should be reserved to you and key corporate stakeholders.
3. Make sure you own your data
Designating the “customer” as the “data owner” in agreements with cloud service providers is a must. More specifically, terms that address what happens in the event of a merger, bankruptcy or any event that leads to the termination or alteration of the relationship should be clearly outlined. Identifying the customer as the data owner and preserving the right to retrieve data within a reasonable time and for a reasonable price will help prevent company data from being used if there is a disagreement or change in ownership.
4. Know where your data is physically located
Knowing where your data is physically located is important because there could be legal consequences. For example, several jurisdictions have their own unique privacy laws that may impact where employee data can be physically located, how it must be stored, and how it can be used. This can result in conflicts where data stored in the cloud is subject to discovery in one jurisdiction, but disclosure is prohibited by the laws of the jurisdiction where the data is stored. That means knowing where your data will be stored and understanding the applicable laws governing data privacy in that jurisdiction is critical.
5. Get it in writing
Sales representatives come and go, especially in the cloud industry. There is no guarantee that the same person involved in the negotiation process will be there before the ink dries. Therefore, it’s important that you get as much as possible in writing. You can engage all staff responsible for the design, implementation and management of the cloud system involved in developing criteria to be included in the contract.
6. Limit the number of people with access to the software
SaaS services sometimes come with a per-user license, for the use of which you either pay a monthly or annual fee. The first thing you should do is to limit the number of people you provide access to the software. Also, make sure that the number of software users falls within the number of licenses you have purchased.
7. Retention policies
Part of any good data retention program requires systematically deleting information that the business does not have a legal or business need to retain. Keeping information longer than necessary increases long-term storage costs and increases the amount of information the organization must search in the event of future litigation. This is why the cloud provider should have the ability to automate the archiving, retention, and disposition of information in accordance with the customer’s preferred policies as well as the ability to suspend any automated deletion policies.
8. Backup and security
Where and how the information is backed up and secured is critical. For many enterprises, merely losing access to email for a few hours brings productivity to a risky level. Actually losing the company email due to technical problems or as the result of insufficient backup technology could cripple some companies indefinitely. At the same time, losing confidential customer data, research and development plans, or other sensitive information due to the lack of adequate data security and encryption technology could result in legal penalties or the loss of important intellectual property. This is why understanding how your data is backed up and secured is critical to choosing a cloud provider. Equally important is determining the consequences and the process for handling data breaches, losses, and downtime if something goes wrong.
Why do I support utility computing?
While utility computing often requires a cloud-like infrastructure, its focus is on the business model on which providing the computing services are based. Simply put, a utility computing service is one in which customers receive computing resources from a service provider and “pay by the use” much as you do for your electric service at home.
The main benefit of utility computing is better economics. Corporate data centers are notoriously underutilized, with resources such as servers often idle 85 percent of the time. This is due to over provisioning, and utility computing allows companies to only pay for the computing resources they need, when they need them.
Pricing remains one of the biggest considerations when conducting your cloud planning. While traditional data storage requires storage managers to buy huge amounts of storage that may end up going unused, cloud storage pricing offers a pay-as-you-go model that allows companies to control costs. And because cloud storage is service based, organizations don’t need to buy, manage and maintain storage hardware or undergo technology refreshes, which means reduced administrative costs.
Rick Blaisdell is the CTO of ConnectEdu and a cloud computing expert. He has over 20 years of product, business development, and high-tech experience with Fortune 500 companies, developing innovative technology strategies with particular expertise in: cloud computing integration, strategic planning and development for Information Systems; delivering cost effective IT services.
Interested in more content like this? Sign up to our newsletter, and you wont miss a thing!
(Image Credit: JD Hancock)