Today's cloud contracts are driving away enterprise adoption

As cloud providers push 'take it or leave it' contracts, many businesses push back -- or avoid the cloud altogether

Cloud computing has a growing problem: Many providers haven't built contract negotiations into their customer on-boarding processes. Instead, they offer "take it or leave it" contracts that protect the provider from everything, transferring all responsibility, liability, and risk to the businesses using the cloud services. Small and medium-sized businesses have accepted such contracts because they can't afford the lawyers to second-guess them. But large businesses have lawyers, and they aren't about to enter into such one-sided contracts.

That reality could inhibit cloud adoption, unless cloud providers get realistic about these contract issues. As Computerworld recently reported, large businesses have already started pushing back on cloud providers about these contracts.

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Today, cloud providers typically offer contracts that look more like they came from iTunes than a provider to IT. They're designed like all those consumer contracts that users simply click through until they find the Accept button. That won't fly in large businesses, which have stricter guidelines around managing liability, so enterprises will try to negotiate these contracts.

Here's the rub: Often, there's no one to negotiate with. The contracts are "take it or leave it," presented on a website as part of the signup process, with no enterprise sales group to negotiate with at the cloud provider itself. If large businesses can't negotiate these contracts, expect them to look for a provider that will negotiate -- or simply avoid the public cloud altogether.

If public cloud providers want to move up the food chain, they need to accept the fact that enterprises will require special attention. This includes, dare I say it, human negotiations. Also, they'll neeed to provide wiggle room on dealing with liability and SLA issues.

This could be why latecomers to the cloud computing space, such as Hewlett-Packard, could get a leg up on the current cloud computing leaders, such as Amazon Web Services. Providers like HP understand how to get through these negotiations. To remain leaders, the current cloud leaders need to get a clue and adjust their sales processes accordingly.

These "take it or leave it," one-sided contracts are a clear threat to cloud computing's progress. It would be shameful if cloud computing died due to lawyers and an avoidance of direct dealing with customers.

This article, "Today's cloud contracts are driving away enterprise adoption," originally appeared at Read more of David Linthicum's Cloud Computing blog and track the latest developments in cloud computing at For the latest business technology news, follow on Twitter.

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