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Weak contract terms could create problems between cloud service providers, clients

6/21/2011

According to a recent report conducted by the Cloud Industry Forum, having weak terms of use in a contract between a cloud provider and client can lead to problems.

CIF chairman Andy Burton, who is also a CEO of a web hosting company, has pushed for increased clarity within cloud contracts recently. He feels that, by reducing the ambiguity of contract terms, more potential customers could become interested.

Communication between cloud partners is key, which is why the CIF made it one of its primary underpinnings in its Code of Practice released last year. The code offers advice regarding clarity in regards to customers in several areas of a contract, such as third party liability.

Cloud computing contracts are often more collaborative between company and client and thus, they have become tricky to craft since the advent of the new technology.

Now, more potential clients are nervous about entering into cloud contracts, as they are skeptical about which providers they can trust with their business and sensitive, highly important data.

"The cloud is about Business Process Re-engineering rather than the technology, so the key questions are - who is accountable, what guarantees are being offered and are they of any real value, where is the data stored, and is contract end to end, covering all aspects of the service. Cloud services are now at the stage where users should not make assumptions on such questions," Burton relayed recently.