services entice and contain combination of different and multi facet services like aspects of software license, hardware and software support, service level arrangements, data storage, data transmission, backup and recovery.

Issues like data access, data protection, data security, data availability, data portability and disaster recovery are the core to the cloud computing. Data security and data protection are the twin major concern in the cloud computing among the other host of challenges. How to address these challenges and concerns?  It’s by way of negotiating and signing appropriate and watertight contract between the cloud computing service provider and service hirer with explicit provisions for the all the concerns and challenges in line with the service requirements and scope of cloud computing services.

Contractual Framework: Cloud Computing Perspective 

Cloud contracting are substantially different from traditional IT outsourcing contract be it Saas, PaaS, IaaS or FaaS. Each type of cloud computing is different in it characterises thereby scope of outsourcing services differs which impacts nature and extent of party liabilities in given services. Chosen type of cloud service model Saas or PaaS or IaaS or FaaS is crucial in having the contractual terms along agreed scope of services.

Cloud computing contracts are global in nature so going by standard terms without understanding the compliance requirements under applicable laws can be bane. In order to avoid the unwanted conflicts between eachparty it is foremost to negotiate the contract before signing. It is better to add the all-legal requirements and specify who is responsible for the compliance buyer or service provider under the contract in order to know and comply. Along with   this, it is critical to consider intellectual property transfer aspects  as  sometimes these aspects are missing in the standard contracts and which may lead to conflicts.

If you are buyer or service hirer it is pertinent note that instead of just agreeing to the standard contract provided by service provider understand and negotiate before signing. Try and understand the AS IS terms and non-negotiable terms which helps in identifying negotiable terms instead of contract in entirety and time consuming.

Key Contractual Terms for Cloud Computing Contract

Data Protection: Extremely crucial to consider and include provisions for the data protection measures in order to avoid data breach, data theft.  Detailed provision for how the data protection issues is addressed if happens and who is liable in this regard. Clear terms on the storage location of data, access to such data and monitoring customer or access to data

Execution of Data Processing Agreement between the buyer and Service provider may be needed along with cloud computing contract. Obtaining privacy consent prior processing or storing the data depending upon the legal requirements. Data Privacy Officer/s need to be loop in order to comply with the applicable laws. Based on the industry and sectoral wise data protection and privacy laws differ so both the buyer as well service provider needs to be mindful of compliance aspects.

Data Confidentiality and Protection of Business Secrets: Depending the nature of data especially in case in case sensitive data, trade secrets, Intellectual property rights cloud computing contract shall contain provision for confidentiality obligation  and measures to address the breach of the confidentiality obligation. For better protection of data in this regard encryption, including nature and extend of encryption.

Scope of Services& SLAs: Clearly specify the services description and types of services included in Cloud computing Contract. It is better to begin with verifying the scope of service by the buyer. Elementary to consider and add clear terms as to the support extended and ongoing service without interruption. Buyer needs to be assured of the availability of services and support at all times.

Backup and Recovery: It is always advisable to verify the provisions with regard to backup and recovery of capabilities of service provider to keep the interiority of the data processed. Check whether service provider uses automated tools / mechanism to keep the data in tack. What measures service provider takes to avoid the issues of losing the data in order to restore.

Contract Termination, Renewal & Transitional Provisions: Well defined term and termination provisions are must to avoid sudden discontinuation of service under cloud computing contract as cloud bis based on access to a service.

It’s extremely crucial in contract to know the termination terms as cloud services based on access to a service. Immediately upon expiry buyer loses access to a service.  From business and continuity perspective its essential to some sought of feasible option under the contract not to stop the services which severally affects the business or transactions. For example, auto renewal clause in contract or buffer time to renew after termination of contract to the buyer or periodical reminders to buyers well in advance to consider for the renewal or transfer.

Inclusion of provisions regarding the transitions services from IT infrastructure to cloud and data migrations. If feasible include clause for post exist termination assistance for smooth transition of data to third party if required will be of immense help.

Take Away:  Cloud Computing services are trending and in demand. Need for cloud computing services are skyrocketed due to its inherent nature of ease to access. However, cloud services also come with host of concerns and use of cloud services especially in case of business-critical applications, hosting of sensitive data in the cloud requires to execute detailed cloud computing Agreements. Inclusion of   core five explicit provisions for data security, data access, data availability, data portability and disaster recovery are crucial in cloud computing services.