Cloud Computing Service Agreements

04/19/2012

As a preliminary matter, one would expect that the terms for a free cloud service will differ greatly from terms for a paid cloud service. Also, one would expect that cloud services offered to hundreds or even thousands of individual users will differ compared to cloud services marketed to a handful of enterprise customers.

Every cloud computing vendor should have standard “Terms or Use” and “Acceptable Use Policy” documents for its cloud service, which are often presented to the customer in an online format. If the cloud service is free or low-cost, the cloud vendor will likely require agreement to these documents via a mouse click as the preliminary (and often sole) prerequisite for a customer using its service.

If the cloud service is paid, the cloud vendor will likely have a service level agreement to supplement its online documents. A very simple service level agreement might state that the cloud vendor will keep the system available twenty four hours a day, seven days a week, excepting planned downtimes and events outside of its reasonable control. Customers generally want more negotiation of such service level agreements. Cloud vendors may be expected to provide an editable version of the service level agreement to facilitate negotiation.

Customers should know that a big advantage of the cloud is that downtime can affect hundreds or thousands of customers. This creates an enormous incentive for the vendor to maintain promised service levels, over and above anything in the traditional software model. However, because cloud services must be provided consistently among a number of customers, most vendors will not be open to enormous movement on service level agreements. Similar to utility or telecommunications contracts, a cloud provider’s ability to serve multiple customers rests on the standardization of its technology and processes. Pulling too far away from the standard model will affect a cloud vendor’s ability to provide services through a common architecture.

To read the full article, click on the PDF linked below.

PDF - Cloud-Computing-Service-Agreements.pdf

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