Cloud UK Contracting Cloud Services A Guide to Best Practice

Executive summary

Many similes and metaphors have been used to describe Cloud Services ranging from ‘elastic supply’ to ‘a form of outsourcing’. The challenge in entering any supply contract though is to define and embody in plain words a common understanding, set of expectations and requirements between (normally) two parties committing to a supplier-customer relationship.

The irony surrounding the coming-of-age of Cloud Services in that respect is that it is not, as so many often comment, the advent of new technology that is so compelling and valuable to the market; rather, it is the agility, scalability and almost utility basis of supply that is transforming IT procurement and challenging the way IT is purchased, provisioned and maintained. Cloud, by nature, is creating a greater sense of capability and collaboration which can, if not checked, drive contractual and operational ambiguity. This is further exaggerated when purchasing indirectly through the IT channel, which is equally caught up in the shift from pure on-premise to hybrid online solutions.

In traditional markets there is often a practical path to establish relationships between parties such as; a physical point of presence for the business supplying goods or services; a track record or a personal reference/relationship to provide that essential ingredient of ‘trust’ between the parties; and, clarity of who is in charge and what can be delivered. In the online world, where the number of new suppliers is growing at an astonishing rate, the traditional norms are removed and we are returned to the basic fundamental principle of Caveat Emptor or “Buyer Beware”, not because there is greater risk, but because the supply model is different for SaaS and IaaS and that basic principles need to be re-established for these online relationships. In particular end users are seeking comfort on the reliability, control, integration and security of hosted services as they expand their IT infrastructure from on-premise to encompass online.

As with all new markets, there are entrants who are credible, well intentioned, capable and professional, and, there are unfortunately those that are looking to make a quick profit and whose public claims won’t pass the test of scrutiny. Coupled with this is the increasing prevalence of online click-through agreements, originally designed to make procurement easier. However, after a decade of on-premise software End User License Agreements and web services agreements, this experience is to some extent muted in impact as many have adopted the behaviour of ticking the ‘I agree’ box to move forward in the process without the necessary caution of reading the small print. Collectively, these issues present two challenges for the would-be Cloud Service buyer:

  1. How do I tell the difference between capable and rogue suppliers?
  2. How should I contract for services with a CSP?

Point 1 is addressed by the CSP Code of Practice (see for details of the CoP which is designed to provide a normalised view of all credible CSPs so that an end user can make an informed decision). Point 2 is the subject of this White Paper.

To be clear though the author’s over-riding position is one of complete support for Cloud Services in their manifest delivery models and alliances. That, Cloud Services will continue to grow and revolutionise access to technology for many years to come. That there is no right or wrong model, it is a matter of determining best fit and appropriate governance as well as the need for establishing clarity on how to contract and transparency of vendor capabilities and commitments.

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