Cloud SLA Negotiation: The Basics Are Still Critical
Given that the majority of Saugatuck clients today utilize multiple (usually dozens or more) Cloud-based IT and business services, how many have dusted off the SLAs related to those? What we’re finding out from our ongoing SaaS and Cloud IT research programs is that most have not given enough time and thought to viewing and understanding their Cloud IT SLAs. And too many, it seems, have not even negotiated the terms of those SLAs with their providers. That’s bad business for enterprise user/buyer and provider both.
This week, we’re reviewing and updating our original guidance regarding SaaS/Cloud SLA provisions and negotiation, and we strongly recommend that our client do the same. We’ve updated our core Strategic Perspective on the subject, which is being published this week for clients of our CRS subscription service. Here are the five points that every IT and business executive needs to understand and negotiate when it comes to any Cloud service level agreement:
1. Understand the relationship between Master Services Agreements (MSAs) and SLAs, as well as which terms and conditions belong in one and/or both.
2. Know which availability and support terms and conditions are worth worrying about.
3. Focus on performance standards-related terms and conditions that are business-critical.
4. Know which penalty-related provisions are most important.
5. Understand all SLA exemptions.
A key piece of advice: Enterprise executives, especially IT and business leaders, stand to gain by promoting the expectation that SaaS SLAs should be widely available and open to negotiation. However, the burden is on those executives to determine which SLA terms and conditions are most critical to their business requirements. and thus should be subject to negotiation. Not all SLA terms and conditions need to be negotiated.
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