When there's a third party in the cloud

A third party can increase risk, so your contract should address this possibility.

By Thomas Trappler, Computerworld |  Cloud Computing, contracts

No matter how good your due diligence ahead of signing a cloud contract, none of us can predict the future. Because cloud computing is a growing and volatile market, it has many new players. The weaker among them might not have long-term viability, while the stronger ones could become targets for acquisition. In either event, your data and ongoing access to the service could be at risk, so it is important to do what you can to mitigate these risks. One approach is to include contract language along these lines:

ASSIGNMENT. This Agreement shall be binding on the parties and their successors (through merger, acquisition or other process) and permitted assigns. Neither party may assign, delegate or otherwise transfer its obligations or rights under this Agreement to a Third Party without the prior written consent of the other party.

Cloud brokers

Client organizations that are new to cloud computing may engage third parties for assistance in making the complex transition to the cloud and integrating with existing infrastructure. The recently issued Request for Information #QTA00AH12BRI0002 by the United States General Services Administration highlights the growing importance of cloud brokers.

Cloud brokers essentially play matchmaker between cloud clients and cloud vendors. Some types of assistance that a cloud broker may provide to clients include:

* Enhancing an existing cloud service through access management, performance reporting, etc. to make it more effectively meet the client's needs.

* Combining and integrating multiple cloud services into one or more new services that meet the client's needs, including integration and secure movement of data between the client and multiple cloud vendors.

* Aggregating the demand for cloud services among a community of clients with common needs in order to negotiate improved contract terms and pricing, such as Internet2's new Net+ program does in higher education.

While a cloud broker can add value in all of these roles, as well as helping the client address complexity and reduce costs, the use of one still brings a third party into the game, which in itself introduces different complexity and different costs. In short, if you use a cloud broker, you need a contract to govern that relationship, and you need to ensure that the broker contract effectively aligns with any direct contract you may have with a cloud vendor.


Originally published on Computerworld |  Click here to read the original story.
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