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Rigid contracts may inhibit enterprise cloud adoption

More flexible contracts may address common cloud concerns among enterprise customers.

The cloud service contract serves as the foundation of the technology partnership between customer and provider. However, it may also be the reason that customers move away from a vendor. The problem, according to InfoWorld’s David Linthicum, is that many of these agreements are designed solely to protect cloud storage companies. This style of non-negotiable terms is not fit to meet the stringent liability requirements that exist in the enterprise market.

“The contracts are ‘take it or leave it,’ presented on a website as part of the signup process, with no enterprise sales group to negotiate with at the cloud provider itself,” Linthicum wrote. “If large businesses can’t negotiate these contracts, expect them to look for a provider that will negotiate – or simply avoid the public cloud altogether.”

Rather than stick to contracts that are written in stone, Linthicum suggested that cloud providers allow for some wiggle room, particularly in regard to service-level provisions. Actively working with customers to determine what is both reasonable for the cloud vendor and still meets unique corporate needs may allow emerging cloud builders to be more competitive in the large business sector.

Forbes contributor Joe McKendrick emphasized the importance of negotiation in his list of necessary skills for any cloud-based IT job. While his action items are focused on the customer, they outline a pressing need to create better vendor-customer relationships. In his list of job skills that are likely to facilitate this process, he placed importance on the ability to track and manage data stored in the cloud, contract management and in-depth consultation services.

Particularly in light of the shortage of cloud expertise, vendors are likely to play a critical role in helping their customers make the most of the technology. As McKendrick noted, only 20 percent of the current IT workforce has a wealth of cloud expertise. This places greater importance on transparency in regard to data storage practices and clarity in contracts.