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Negotiating hybrid IT and cloud contracts. Takeaways from the N-sight of 25/01/2018


Date:25/01/2018


Hybrid IT and cloud are a new world for companies and their vendors. And when it comes to negotiating contracts in the face of all the changes, the devil is in the details. While some aspects of contracts and SLAs are similar to ‘traditional’ IT contracts, others are very different.

In this N-sight, we heard the legal perspective of what you need to cover in your contracts, and how to make the contract process smooth. Then, we participated in an interactive discussion on participants’ concern, issues and experiences.

 

The presentation by Piet Herman, Contract creation consultant, is available for our members, after log in.

 

 

What should be in your hybrid IT/cloud contracts

 

First up, Laurens Dauwe, IT & Telecom lawyer with Stibbe, brought his significant experience in different sectors to bear, to explain what you need to consider when negotiating your contracts for cloud and hybrid IT.

 

Laurens provided some spot-on advice, starting from the end: in other words, prepare your exit from the cloud contract at the beginning of the process. Stibbe has seen companies go through some bad experiences! Sometimes cloud providers refuse to give back your data: ask for termination assistance. Also, look at the exit as a project: in most contracts, it’s a good idea to foresee an extension of the termination period.

 

His other advice:

  • With more and more IT in the cloud, the operational risks increase, and they shift with the technology. As a customer, you may want unlimited liability, but be reasonable.
  • Lots of Oracle and SAP contracts are based on data-on-premises. But when you move (some of) the applications to the cloud, you may be moving outside the scope of your contract.
  • Take care with Microsoft licences based on CPU power when combining cloud IT and on-premises IT.
  • Make sure that it is specified in your contract that your provider must inform you about any security breaches.
  • In the context of the GDPR and data subject rights - make sure that it is specified in your contract that your provider must inform you if they receive a demand from a data subject.

 

How to successfully contract for IT outsourcing 

 

Piet Herman, Contract creation consultant, then shared his experience, lessons learned and best practices. An outsourcing contract needs to be understandable, he started, including for the technical people involved. But you need to be a reasonable customer: your provider can’t ‘push’ your CSR codes to all of their subcontractors. Stay to-the-point.

 

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