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Cloud Computing Continues to Put Jobs at Stake

Dec 28, 20092 mins

What jobs are we talking about?  Yours.  That is, the trend in cloud computing continues, in general, to be service offerings provided under some of the most minimal service level protections ever seen.  When those meager service levels are further diluted by numerous exceptions to and qualifications on performance and, in many cases, unlimited downtime for “scheduled maintenance” (i.e., as long as the vendor gives you a heads up, it can take the service down for as long as it wants without fear of a service level failure), you have a service that is being provided on more or less an as-is basis.  While this approach may actually be considered in non-critical, low-risk engagements, it can be a “job-coster” for the business person who accepts these risks in the context of critical, high value engagements.

In a recent engagement, a vendor of an expensive, critical solution offered an SLA that provided little in the way of credits for failure to achieve required performance standards.  When pressed on this issue, the vendor offered no movement on the relatively useless credits, but offered to provide the customer with the right to terminate in the event of ongoing poor performance.  How did the vendor define “ongoing poor performance”?  They offered termination if the service was down for four consecutive months or any five months in a seven month period.  This type of offer is the reason for the title to this blog entry:  it affords the business person who accepts this type of useless protection to place their job at risk when the vendor fails to perform.  That is, more and more vendors simply cast their refusal to provide meaningful service levels and remedies as business risks that must be assumed by their customers. 

In the current economic environment approving an agreement that would require the company to pay essentially full price for months and months in which service is not provided or performance is so spotty that it is all but useless, could be a career ending decision.  That is why at least some business people are taking a long, hard second look at these types of arrangements and refusing to sign without appropriate protections.  Those that don’t had better update their resumes.


Michael R. Overly is a partner and intellectual property lawyer with Foley & Lardner LLP where he focuses on drafting and negotiating technology related agreements, software licenses, hardware acquisition, development, disaster recovery, outsourcing agreements, information security agreements, e-commerce agreements, and technology use policies. He counsels clients in the areas of technology acquisition, information security, electronic commerce, and on-line law.

Mr. Overly is a member of the Technology Transactions & Outsourcing and Privacy, Security & Information Management Practices. Mr. Overly is one of the few practicing lawyers who has satisfied the rigorous requirements necessary to obtain the Certified Information System Auditor (CISA), Certified Information Privacy Professional (CIPP), Certified Information Systems Security Professional (CISSP), Information Systems Security Management Professional (ISSMP), Certified Risk and Information System Controls (CRISC) and Certified Outsourcing Professional (COP) certifications.

The opinions expressed in this blog are those of Michael R. Overly and do not necessarily represent those of IDG Communications, Inc., its parent, subsidiary or affiliated companies.

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