Gartner warns of cloud service contract risks

There are four major areas companies must investigate before signing contracts: Gartner

Gartner says that the immaturity of cloud services raises several risky issues that CIOs must be aware of when contracting for these services.

Gartner identified four issues that must be taken into consideration when enterprises plan to enter into cloud computing contracts.

"Cloud service providers will need to address these structural shortcomings to achieve wider acceptance of their standard contracts and to benefit from the economies of scale that come with that acceptance," said Frank Ridder, research vice president at Gartner. "CIOs and sourcing executives have a duty to understand key areas of risk for their organisations.

The four risky issues are; cloud sourcing contracts are not mature for all markets, contract terms generally favour the vendor, contracts are opaque and easily changed and contracts do not have clear service commitments.

"It's essential that organisations planning to contract for cloud services do a deep risk analysis on the impact and probability of their risks, and they should also plan mitigation for the most critical issues," said Alexa Bona, research vice president at Gartner. "This might cost additional money, but it is worth the effort. Risk should be continuously evaluated, because contracts can change - sometimes without notification."

To Continue Reading: Click Here
------------------------------------------
Source: itp.net
By: Georgina Enzer