The beginning of the end for corporate cloud computing?
I really hate to say it, but it looks like I have been proven right. Readers will recall how I have been calling for transparancy in the contracts between customers and this new wave of cloud providers. Companies such as Microsoft have been and continue to do their utmost to confuse and layer a smokescreen over the whole liability issue. I have detailed this many times as it has unfolded, and have asked repeatedly for clarification.
In short, these cloud providers are doing their very best to ensure that they hold no liability whatsoever for your data. Their Service Level Agreements can allow for days of downtime per month for an average business that runs from 9am to 5pm. Their liability, at best, is to give you your money back. There is no hope for consequential loss, compensation for downtime and so forth.
Worse still, companies such as Microsoft have decided to take a quite cavalier attitude to where your data is actually held, and despite assurances that it won’t be moved outside of the EU, they are simply not prepared to put that in writing in a clear and unambiguous way. Their contracts are masterpieces of obfuscation and confusion.
Clearly, at some point, this was going to end in tears.
So imagine my surprise (not) to read that, according to a report in SeachCloudComputing, that Eli Lilly, the huge company, has walked away from the cloud computing service offered by Amazon “after failing to come to terms over legal indemnification issues”.
According to the report, Amazon was completely unwilling to take joint liability and accountability for the service provision. Eli Lilly, it seems, has decided that this isn’t in its best business interests and has walked.
I predict this is just the beginning of a long period of pain between cloud customers and suppliers. Many large corporates, such as Eli Lilly, will now be coming to the end of extensive trials and their legal teams will be nailing down the details. It appears, if this report is correct, that the cloud vendors are sticking firm and not wanting to budge.
Of course, if I was in the position of being a cloud vendor, I too would want to take on as little liability as possible, preferably none. Maybe the vendors will find the “pay peanuts, get monkeys” financial model might be enough to tempt star-struck customers in the short term, but is no basis for forming long-term relationships with the big boys.
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