Hybrid IT and cloud have become ‘standard’ for companies. The contracts between the company and the provider(s) define the details of the service, and the interactions between the two organisations. That means negotiations or tendering are critical to ensuring that your company receives the service and relationship it wants and needs.
However, we know from our bi-annual market study that many organisations located in Belgium don't negotiate their cloud contracts. For the question 'Did your organisation approach any cloud provider to adapt the proposed contract?', 53% of respondents answered 'no', compared to 24% who answered 'yes' (the remaining 23% 'didn't know').
Both KBC and the National Bank of Belgium, our speakers, highlighted the importance of teamwork: involve your security officer, your DPO and your compliance department, and verify with them the specific clauses in the contract and in the tenders. Negotiation is a give-and-take. As a company, you are only one of many clients; however, with some creativity, an acceptable outcome is possible. For example, in terms of ‘applicable law’, try to avoid US or UK law, but agree to French law. Why? Because although the details of French law are different than Belgian law, the broad structure is comparable.
Our speakers gave insights on how they deal with the specifics when negotiating cloud contracts. A few examples included:
With cloud, the devil seems to be in the interplay between various separate elements. If you don't follow these examples, a software vendor could tell you at some point that a new version will be launched, replacing the old one, but at a 20% cost increase. You might be backed into a corner of finding it easier to accept the price increase than to find a new provider in a short time period, even if you think the ‘new’ product doesn't differ that much from what you were using.
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