Cloud contracts: how useful is it to have one throat to choke?

Angry businessman punches through his laptop screen

Should a business look for one cloud contract One contact to rule them all

Or, as Dell were putting it during its recent TechCamp, “one throat to choke.” The idea being that if you go to a single supplier for all your cloud services then it is accountable, findable, interested in you, and you benefit from their overall reputation. One-stop cloud shopping? Really?

Can cloud services be defined?

Now, let’s allow a bit of slack for the pressures of making soundbites in a marketing presentation, and let’s also acknowledge the truly staggering breadth hidden under the skirts of the two-word can-can dress that is “cloud services” – after all, in Dell TechCamp, “cloud” even stretches as far as a dinky little shin-bashing baby blade chassis with on-demand power management and an embedded iSCSI array or three. While most non-techie board members would consider that to be just old fashioned heavy metal, the fact is that the software platform inside is a private cloud - that's the theory anyway.

The actual sense of their comment didn’t land in my head until I went to another event, the Parallels Summit in Las Vegas. Parallels, as a vendor of cloud hosting software, does a lot of research, finding that new SMBs are consumers of services from a multitude of cloud providers, happy to mix and match suppliers as the occasion demands.

I’m not going to play “who’s right, who’s wrong” here because in cloud all that does is make vendors come out with “it depends” answers. The more interesting question is, how can you tell the right balance between one source, and pick-n-mix, for your business? It is safe to say that having a single relationship with an indifferent cloud service provider, where none of your data is physically within your reach and your employees are bringing, not just their own computers, but also their personal email addresses, is a recipe for disaster.

In this situation, traditional sources of disquiet like being offline for a day or not having a password repository for your colleague’s mailboxes are joined by more damaging scenarios. To take an extreme example, if your supplier believes your account is being misused in any way, it will cut you off.

Perhaps the most pernicious interruption at this kind of level is the moving compatibility target; this is where the provider decides it will supporting your preferred access method but won’t divulge an alternative as that would constitute forward-looking, price-sensitive information at investor marketplace level.

The simplest, everyday example of this crosses the category lines between cloud, consumer technology, and BYOD. I have had to console people who, on reading Gmail instructions to upgrade their browsers, took that as meaning they needed to spend a healthy chunk of precious cash on new laptops, because that’s what the sales assistant in their nearest retail park told them was the correct fix.

API level

The techies shouldn’t be laughing at the gullible users just yet. I know of any other company that was a keen user of Amazon web services from an early date. In a classic case of early adopter syndrome, it rapidly realised that, while various promises were made about the survivability and lifecycle of the service, in reality it needed to spend at least a day every other week keeping up to date withthe services exposed at an API level by Amazon.

Typically, applications written within the small business sector have a life-cycle and an update schedule driven by the business sector they occupy. My client realised that its early foray into cloud had an update schedule unpredictably measured in hours, especially when a “security event” was declared in the API stream it had chosen to use.

This was two years ago - in Amazon time, several ice-ages ago - and the relevant description pages have long since vanished. That in itself makes my point for me. Nowhere in the boilerplate T&C documents does it say the consumer has a right to ask for an API development hold on a cloud compute service, and there’s little chance of redress should this particular goalpost move away at speed.

This explains why those SMBs surveyed by Parallels, show clear signs of consuming cloud services from seven distinct sources. Some of that high count is about specialised data but other instances are all about practical insurance of business-critical small business resources. If your mail provider or your online document repository vendor makes an inconvenient platform change, it’s a lot easier to have an alternative ready to roll than it is to drop everything in a dead panic. Smart, long in the tooth email service users tend to achieve this by having both the .com and the .biz flavours of their domain name, domiciled in different places.

However, don’t be too hung up on those diverse sources. Not being able to exit from a cloud contract for reasons of non-compatibility among those seven is a disastrous trap. It was Paul Maritz, while CEO of VMWare, who warned against “Hotel California hosting”, his name for lock in services mis-sold under a cloud banner. True Cloud includes the ability for the client to switch or expand its utilisation, on demand.

This is an area where the scale at which you operate delivers totally incomparable experiences. No large scale mega-corporate would be happy with “click and run” online contracts, and no tiny little two-person startup would expect to be able to scribble on a contract their preferred version of the terms and conditions, events of default, and so on. Putting these two tribes in the same room produces confusion, fear, accusations of dishonesty or unfitness to operate: Very seldom does the disjointedness of approach actually get some analysis.

Three cloud issues

In reality, small business life is not about punitive or litigious contract assembly. It’s about keeping your business going, and not giving away either secrets, or control. In working with cloud concepts and contracts, there are really only three issues to consider:

1) How much of your business is technology? If you are a web-based retailer or a content creator of video or 3D rendering, then Dell’s attitude towards cloud will be well aligned with yours, because a single supplier presents certain advantages, and you are a lot closer to a hosting business. The basic question is, does business survival look more likely if you own your servers? If yes, then multiple contracts look foolish or pointless.

2) Who owns your domain name? Yes, this is commonly perceived to be a nerdy speciality but there’s no getting away from the freedom of action conferred by having you as the definitive online owner of your domain. The strongest evidence for going to the bother of using a separate online registrar is the number of web design & hosting houses for the SMB sector who helpfully take that worry away from you – thereby locking you in to an ongoing relationship. Having your domain absolutely secured is the first best step towards protection against meltdown. Incidentally, take note of how many domain registrars rapidly fall back to paper, telephone or even fax identity validation, and eschew online control panels. Could they know something about the value of domain names that we don’t?

3)When faced with uncrackably armour-plated contracts from some monstrous juggernaut of a service company, you can’t vary the terms on their side: So, each time you sign up to one of those, simply write out your escape plan. This isn’t going to be sent to them, it’s going to go in your internal filing alongside their contact details. Your escape plan could be as simple as “have copy of website on USB key in sock drawer”, or “print second SIP phone number on business cards” – remember these are business methods of escape, not technical – and write yourself a little mini project plan for how long they will take to have the desired effect.

If you can’t do this, and it’s a case of 100 percent dependence on that one massive service then perhaps you need to ask them for a more expensive, but high performance, contract. Lots of the bigger providers only get a bad name because people mis-use their services while the smarter, faster service is only a few pounds a month away.

I think cloud service mobility is the only way forward for businesses. If you can’t achieve an easy move from one provider to another, then there has to be a good reason for working out what’s so difficult, and what you can do to fix the problem.

Depending on contract law to act in your favour when there is a cessation of service is not going to make your business better off – I can think of two instances where what looked like a gargantuan multinational online service turned out to be a couple of guys in their back room, who rather than making good on their contractual promises when their service went into meltdown, instead posted apologetic, confessional videos on YouTube. I would send you to take a look, but the videos were arbitrarily removed for breaking obscure terms-of-use clauses.

And that’s really all you need to know.