IACCM Contract Management Forum

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Mythics Emergent Group
2020-05-04 20:51:41

Public Cloud in the IT Space - Cost of a Contract

Cloud has significant impact on the cost of Contract Creation and Negotiation. Data Processing and Security terms can be particularly difficult to negotiate, especially in the Public Sector Space. Pricing - especially where a good portion of Cloud is priced in a use-it-or-lose-it-model - can present a lot of customer concerns. Customizing the scope of the Contract to meet customer needs can prove beneficial, but given the lack of awareness, understanding, and knowledge of Cloud, it's not without a cost. Many customers still don't understand Cloud - this requires additional time explaining the ins-and-outs for customers in order to get them to buy Contracts where Cloud Service offerings and/or Cloud Professional Services are in scope. I will be interested to see how this changes years down the road. Perhaps it won't be so difficult to negotiate and create Contracts with Cloud. Hopefully more and more customers understand what they are buying and are familiar with the concept of Data Processing and Security as it relates to Cloud.
 •  World Commerce & Contracting  •   2020-05-05 07:44:20
Thanks for your post.

You are right that Cloud contracting is still in an emergent state. For anyone who is either offering or considering buying such services, you will find IACCM's research report on 'as-a-Service' contracting is helpful; it includes a set of principles to support negotiation or assessment of the more contentious / complicated terms. See www.iaccm.com/resources/
 •  Fujitsu  •   2020-08-25 08:13:05
Valid point and we definitely see these examples in the IT space where customers don't really understand that whilst the cloud based service is fully operational and hosted outside the boundaries of the customer's premises, they remain on the hook to manage and maintain the security of their assets
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