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Break New Ground

The Cloud Computing Prenup

Bob Rhubart
Community Manager, Oracle Groundbreakers Team

When is
cloud computing like marriage? A cloud consumer doesn't have to rent a
tuxedo to enter into a relationship with a cloud services provider. There are
no rings to exchange and no bouquets to toss. But at some point even the coziest relationship will hit bottom, and that’s
when you discover that saving the relationship -- or getting out of it -- can be a lot more
complicated than getting into it. So
maybe we need to think in terms of a cloud computing prenuptial agreement. Charlie Sheen and Donald Trump have gotten out of a lot of relationships without getting taken to the cleaners, right? How? Prenups. So maybe the same principal can apply to cloud computing. 

When I
mentioned this to Dr. James Baty [LinkedIn], vice president of Global Enterprise
Architecture at Oracle, he cited a clause from the Uniform Premarital
Agreement Act
,
as drafted by the
National Conference of Commissioners on Uniform State Laws:

"Parties to a premarital agreement may
contract with respect to the disposition of property upon separation, marital
dissolution, death, or the occurrence or nonoccurrence of any other event.”

“I would certainly recommend that anyone
entering into a cloud relationship consider what happens to their property,” says
Dr. Baty. Of course, in a cloud
computing relationship we’re not talking about who gets the CDs and your
collection of Xena: Warrior Princess action figures. We're talking data. 

“It is
important to agree on the fate of the data stewarded by the provider, “ says
Anbu Krishnaswamy [LinkedIn], an Oracle Enterprise
Architect.  “The parties need to agree on the process by which data will
be handed back to the consumer, what technology will be used for the data
transfer, the time frame for the transfer, the process for settling any outstanding
balance, and the arbitration process to be followed if either party fails.”

Make sure you leave nothing on the table. “At what point will your billing detail, user
profiles and records of network activity be returned to you by your cloud
service provider?” asks Dr. Baty. “It's easy to get lost thinking about the
obvious property and forget something that might be very important to
you.”
Those considerations go
beyond what is covered in the service level agreement (SLA).

“Most
people think of the SLA as the most important thing,” says Oracle Enterprise
Architect Pat Shepherd [LinkedIn | Blog]. “But the rights of the client in terms of the
provider’s liabilities and remedies are the critical piece. Things happen. Outages, security breaches.
Things will break somewhere, sometime. You need to understand your rights
in those situations.”

“SLAs
don't help much,” agrees Dr. Frank
Munz [LinkedIn | Blog | Twitter], author of Middleware and Cloud
Computing
.
“If a cloud provider breaks their SLA, instead
of a refund you might only get a discount on your next invoice. Obviously this doesn't compensate for the
impact on your business. That's why you have to plan for failure.”

But failure can be
a two-way street. For instance, if an application provided by the consumer and
deployed on the provider’s platform fails to perform, the problem could be the
application, or the platform, or both.

“So before
throwing mud at each other it is important that the prenup states how to avoid
these situations, or at least how to resolve those issues,“ says Oracle ACE Director Ronald van Luttikhuizen [LinkedIn | Twitter],
managing partner at Vennster.

And if no
resolution is possible? “The most
important clause in a cloud computing prenup is the exit agreement between
provider and consumer,” says Oracle ACE Director Floyd Teter [LinkedIn | Blog | Twitter], director of
Innowave Technology’s program management office. “If the service provided is
not up to expectations, or the customer opts to revert to an on-premise
environment or even change providers to reduce costs, the most complicated and
costly portion of the deal is often how the two parties go their separate
ways.” A well-crafted prenup can help to
avoid those costs.

Does this mean cloud computing is a bad idea? Certainly not. Cloud simply represents is a unique, technology-based business relationship. And relationships, business or otherwise, are best entered into with eyes wide open. 

“Know your way out
before you go in,” says Teter. It may
not save your “marriage,” but you’ll save time and money and you’ll eat a lot
less aspirin. 

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