10 Important Considerations for Cloud Contracts
Moving to the cloud brings a wide range of new issues that must be addressed when entering IT contracts. SaaS solutions (Software-as-a-Service) create a much greater dependency on the software vendor than on-premises solutions.
It is important to discuss and clarify these questions with the vendor before placing your ERP system or other business systems in the cloud.
- Payment starts and up-front commitment – When does SaaS billing begin, and how many licenses are you obligated to rent?
- Binding period – Is there a minimum contract term for the SaaS service, and how long is it?
- Rules for scaling up and down – What are the conditions for increasing or reducing the number of licenses?
- Price adjustments – How is the software price adjusted over time?
- SLA levels – What are the availability, performance, response times, etc. for the SaaS service, and what are the consequences of non-compliance?
- Data protection legislation – Where are the data centers located, and is the data processing agreement acceptable?
- Security – What level of data-loss protection and security is provided?
- Maintenance and upgrades – Are it possible to postpone new releases, and if so, for how long?
- Exit terms and services – What conditions apply when terminating the SaaS service, and how is it ensured that you could take your data with you?
- Long-term service commitment – Can the vendor discontinue the SaaS service, or are there guarantees that it will be maintained over time?
