Friday, 27 April 2012

My comment to 'How to negotiate a contract with a cloud or SaaS provider'

Yesterday I read a wise post in InfoWorld: How to negotiate a contract with a cloud or SaaS provider by Mary Shacklett (@MaryShacklett).

I really think it's important we enlight the market on a reasonable level! So I wrote a "short" comment.

Seems like it takes some time (too long time for post momentums) to approve my comment (most probably because of my attached link). I post it here anyway...

Short breakout:
"What's important?Large enterprises have their own legal departments, but most small businesses don't. Small businesses and even enterprises are also very likely to not have a complete file of all of their contracts or not read all of their contracts end to end. A good practice is to
audit your contract file for your SaaS and cloud providers to ensure that it is complete. If it isn't, and you find you have to ask your vendors for copies of these contracts, do it. In every case, be sure to read the fine print of each contract. This is where terms and conditions and also termination and penalty clauses are buried."
My comment:

I like this post. It's very important we (IT-pro’s) advise customers in choosing the right services and providers. The cloud, SaaS and IT Outsourcing business should educate their existing and potential customers. Only talking techniques, products and using trendy words won’t help the customer to understand services, the cloud and aaS.

As you say smaller companies doesn't normally can’t afford the same legal support as enterprises. Service Provider’s (regardless of area (IT Outsourcing, SaaS or Cloud) should strive to offer good and hygienic agreements and be open minded for improvements and sometimes negotiations. Depending of the service: of course different levels of possibility to negotiate exist, a public cloud service can’t or shouldn’t be able to negotiate – it should be easy to sign and adopt and “un-adopt”. But; as the customer you should at least READ the service description, terms and conditions, and consult someone (a legal pro) if you feel uncertain, before accepting. You’re buying things to support your business and make money – don’t be negligent.

In my upcoming posts on I will talk about the devastating lock in and the successful lock in. The devastating is definitely a result of “terms and condition”-hustled customers – and we don’t want customer to end up locked in.

An agreement, if negotiable, might start a bit pro the SP but it should end up a bit pro the customer. If it starts full pro the SP there will be no contract. If it starts a bit pro the customer it will end too pro the customer – and that is not good for the SP or the customer. An agreement works best if its gain both parts. Same goes for pricing.

We should never forget; it’s always the customers responsibility to read the terms and conditions. But it is the service providers responsible to not hustle. Be honest and trustworthy, it will gain the customer, the service provider and the SP-business in general.

Another wise post in this area: 9 IT Outsourcing RFP Response Red Flags

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