A Checklist for Contracting Business in Cloud

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1 A Checklist for Contracting Business in Cloud Authored by Dr Michael Poulin Head of EA, Clingstone Ltd. January,

2 Contents INTRODUCTION 3 Definitions and Regulation Boundaries for the Cloud 4 Recommendations for Wording in Contracts with Cloud Providers 8 Conclusion 12 References 13 2

3 Introduction Cloud Computing (CC) is not a trend or an exclusive Information Technology (IT) revolution. CC is just a symptom of the new wave of Business Architecture, which sees an enterprise as a combination of cooperating business services and platforms [1]. Different types of CC contribute predominantly into services or platforms. For example, Software as a Service (SaaS) becomes an automated part of the Business services while Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) appear mostly as platforms. The phenomenon is that historically IT started to depart into CC at the same time as corporate business started to penetrate technology in IT management. In the Cloud market, business acted as an independent entity, bypassing IT. It seems that are the years of business challenge for the Cloud. While many companies have already tested the waters of the Cloud, others are thinking about it and intensively looking around for practical advice, tips and warnings. Initially, CC claimed technical efficiency reflected in financial savings on systems, applications and their delivery to the market. The major concern was related to security, but some proponents of CC claimed that the security solutions offered by the Cloud providers might be better than it is in the client companies. This may be true in part. For example, Oracle s Cloud has good security, but it requires a client company s security perimeter to be open for it to be effective. If your security is weak, your company can benefit from Oracle security. However, if you can afford Oracle s products it is more likely that you have your own security in good shape and a replacement of your security with the uncontrolled Oracle s might make you nervous. I think that nobody has doubts that, eventually, CC might solve most technical problems, including security. This is why, in my opinion, the focus of executive discussions in the Annual Cloud World Forums (2013/14, London, UK) was on economic and legal relationships with CC. For example, if a Cloud client requires synchronising a disaster recovery (DR) plan for its assets in the Cloud with its corporate DR plan, how would this affect the cost of Cloud services? Or how much more would the cost of the Cloud service be when it must be made compatible with local low and business regulations? Or what might be the driving force behind using CC-based solutions if financial saving becomes negligible due to these compliance requirements? Starting in 2009, we pointed out that the business problems of CC are much more serious than technical ones [2]. We talked about this in the Cloud conferences and other forums, but most people usually turned heads away, with very few exceptions. Cloud enthusiasts were fully focused on technology problems and on the number of companies that started using the Cloud. Those who tried the Cloud and hit a wall of related business problems did not want to expose their pain. At the OVUM Industry Congress 2014 in London, we have heard, maybe for the first time, an honest and open overview of CC business aspects, contracts and legal perspectives and all of them were not that rosy. This White Paper summarises some industry - and some personal experience that enterprises have collected in dealing with Cloud providers. The White Paper takes a Cloud client viewpoint and addresses the commercial and operational risks that companies gain because of CC. In other words, we are offering a series of advice to the client organisations on what they have to watch out for during and after making a contract with a Cloud provider. 3

4 Definitions and Regulation Boundaries for the Cloud For the purpose of this publication, we refer to Public and Private Cloud types only. Following, we specify: - Public Cloud as a provision of cloud services from an IT supplier s data centre to the general public/business community. In a public cloud, the IT supplier s hardware is not dedicated to serving the needs of any individual customer, rather multiple customers are using a proportion of powerful pooled IT resources. - Private Cloud as a provision of cloud services by an IT supplier to a single organisation, or closed group of organisations. Unlike a Public Cloud, a Private Cloud uses dedicated IT infrastructure to provide cloud services to the customer organisation/group of organisations. [3] We also extend the aforementioned definition of a Private Cloud by stating that a Private Cloud does not necessary need to dedicate IT infrastructure to the client (a so-called Shared Private Cloud), but regardless of the infrastructure it can provide full visibility to the client where its assets are located in the Cloud, who they are accessed by, and how and when they are accessed. as Also, the client defines and dictates all changes necessary for the client s compliance, updates, versioning (licenses), patches, etc. In such a case, how the Private Cloud provider performs all these tasks via a dedicated infrastructure or via a virtual one is immaterial to the client. In this context, a closed group of organisations is formed with clients from the public/business community who had signed an explicit Service Contract [4] with the Cloud provider. As the practice shows, Public Cloud providers do not consider explicit Service Contracts and the clients have to accept implicit Service Contracts that they cannot negotiate. Thus, a Private Cloud is any Cloud that is not a Public Cloud. Whether the Private Cloud is situated in the client company or hosted by an external independent business is irrelevant. A Hybrid Cloud a combination of Private and Public Cloud will be discussed later in this White Paper. Sometimes, people equate the use of CC to the use of outsourcing. Though some recommendations and models of engaging with outsourcing may be applied to the Cloud, there are several special aspects that are either unrelated to known outsourcing models or have different implementations in the Cloud. The first and the most important thing to understand is that Cloud services, as with any other services, work in a business execution context (BEC) and technical execution context (TEC). The BEC comprises laws, regulations, rules and even local cultural customs, and the Cloud provider may not ignore them if it wants to operate or they will fail or be fined. CC has an extreme challenge with BEC because a Cloud has a capability of crossing legislative boundaries and has to fit with the judicial regime for the particular client. A Public Cloud provider, in order to resolve this problem, uses such Service Contracts where it has no liability to the local client judicial regime. While a Public Cloud provider protects itself via liability limits [5], it 4

5 exposes 1 the client to the penalties that local regulators can apply for the use of incompliant resources (the Cloud). Yes, someone can accept this and use the Public Cloud, but this client is still legally obliged to adhere to the local judicial regime and no user of a Public Cloud will be exempt. For example, if the Public Cloud provider uses computational resources in one country in the world and the resource provider is on the Sanctions List or AML Listin the UK, it is the client s CEO (or owner) who will be liable and responsible, and maybe even go to prison. If you work in IT or a business part of your company, be aware that you could easily make the mistake of setting up your CEO if you are unaware of the business context of the Cloud provider you are or will be hiring make sure you read the small print! For the country-members of the EU, the judicial regime is a combination of the local country and the EU laws and regulations. In the EU, the CC is regulated by the EU Commission Communication on Unleashing the Cloud [6]. In September 2012, the EU Commission published a Communication and accompanying Staff Working Paper [7] entitled Unleashing the Potential of Cloud Computing in Europe, in which it sought to identify what needed to be done to enable and facilitate faster adoption of Cloud computing throughout the economy and to set out the most 1 See for example the Limitations of Liability section from the Amazon s AWS Customer Agreement: WE AND OUR AFFILIATES OR LICENSORS WILL NOT BE LIABLE TO YOU FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES (INCLUDING important and urgent additional actions [8]. The three identified key action areas were [8]: 1) different national frameworks that divide the digital single market, in particular: related to the complexities of managing services and usage patterns that span multiple jurisdictions and in relation to trust and security in fields such as data protection, contracts and client protection or criminal law ; 2) contracts concerning worries over data access and portability, change control and ownership of data ; 3) a confusion generated by a jungle of standards. The Commission concluded by noting that Cloud computing touched a wide range of policy initiatives, including addressing data protection, action on standardisation and certification for Cloud computing and the development of safe and fair contracts [8]. A combination of data protection, trust and security have been one of the major concerns of Cloud clients for the last several years. The data protection issue is in the central to the emerging Cloud legislation in the EU. According to Kemp Little, there is an (in anticipation of the EU s adoption of a new directly applicable Data Protection Regulation) but there remains a mismatch between the current rules, which take as their start point the 1980 Council of Europe Data Protection Convention before the PC revolution [9]. The framework of international data flow, built around model clauses (in the EU), safe harbour (in the USA) and Binding Corporate Rules, appears disjointed [8]. The ICO Guidance on the Use of Cloud Computing is to be welcomed but further regulatory compliance for Cloud based services is likely when the new Data Protection Regulation applies [8]. In any case, this is a problem that can be solved 5

6 by technology that has a rule-based access control mechanism. In the UK, a general law of data protection is based on the Directive 95/46/EC (Data Protection Directive). It was implemented on 1 March 2000 through the Data Protection Act 1998 (DPA). The DPA is the primary legislation, which regulates the assembly and usage of personal data in the UK. It was followed by The Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR) the use of personal data and Regulations 2011 (PECR Amendment), which rules the use of technologies for storing information and accessing personal data. In January 2012, the European Commission released its proposal for a new European data protection Regulation. While all these legislations have been aimed to protect a Cloud client, their consequences have hit the Hybrid Cloud and the mechanism of Cloud federation that might be invisible to the client. For instance, the Cloud provider of any UK retail client has to be compliant first and foremost with the UK DPA. This means that if a UK-based Private Cloud provider uses a Public Cloud for handling a peak of client s load in the Christmas season from a USA Public Cloud provider, this Public Cloud provider now has to resolve the legal issue between the DPA and American s Patriot Act, even if the datacenter where the data is stored is in the UK. The only way a UK client can control this is via an explicit contract that states that all client s conditions in the contract with the Private Cloud provider must be preserved when the latter federates with another Cloud provider. However, as we mentioned already, Public Cloud providers do not negotiate individual client s conditions in practice. That is, a Hybrid Cloud appears as a Public Cloud to the client. Those in the UK who hire a Cloud for its low cost and elasticity, should think twice about the risk of possible violation of the DPA and the personal legal consequences for them. For example, this relates to Amazon, Microsoft, Google, Oracle, IBM, Saleforce, and others. A very strong movement toward introducing liability for Cloud data processing control in the EU, and especially in the UK, will practically discard Nick Carr s famous analogy of explaining CC as an electricity flow. We cannot find how an electron in your lamp differs from an electron in my lamp, but we very much recognise how a bit of information of my data differs from a bit of your data. That is, the fundamental notions of Public Cloud, such as normalisation (every client is the same as the next one), impersonalisation (no client specifics) and irresponsibility for particular data, are under a threat of vanishing. There is an assumption that client s benefits from the use of a Public Cloud will not sustain the legal BEC. We have talked a lot about emerging Cloud legislation in the EU, and the question is will this legislation be in sync with other regulations applied to Cloud clients in different EU countries? In the World Cloud Forum 2014, the Kemp Little team said probably, not to this question. Thus, the Cloud clients will remain on their own in controlling their legal duties. It is necessary to note that there are two primary operational areas that a Cloud client would be interested to exercise the legal scope of the contract for future relationships with a Cloud provider: a disaster recovery and adoption of changes in the corporate s entities (data and applications) if they are stationing in the Cloud. To achieve this, the DR and flexibility should be included in the Cloud Service Contract as abare minimum. The problem with DR is familiar to corporate business to some degree before, the cooperating Partners and Suppliers had to sync 6

7 their DR plans with the company s plan or guarantee their compliance. In the situation with the Cloud, a part of your company is under the supervision of another business, in other words it must preserve your DR plan for your assets. If the Cloud provider cannot do this, you gain an additional risk instead of reducing it. A few CEOs that we know told us that when they asked their Cloud providers for the synchronised DR plans, the cost of this turned down the financial benefits of the use of the Cloud. An ability to adopt business changes is characterised by the term business flexibility. It comprises the cost of realising the change, a cost of changing this realisation, and the time to market [1]. If the change should be realised for your assets in the Cloud, the Cloud provider must apply your directives, but this may be bothersome to the provider you have to look a step ahead of the current situation. For example, a solution for current change may be done in a provider s cost-effective way, but a change of this change (the next step) will be very costly. We have seen this effect on multiple occasions in regular IT a change is set in stone like there would be no changes tomorrow, and, to apply the next change, the IT needs to refactor/rebuild many things and that could take months. If this pattern is inherited in the Cloud (why not?), your business flexibility in the market gets degraded and you risk losing your competitive advantage. Recall: a Cloud provider looks after its own benefits first and yours second. In the end, we can summarise the benefits and downsides of moving into the Cloud. The table below is facilitated by material of Kemp Little and our personal experience: Benefits Downsides 1 Initial cost reduction 1 1. Additional business risk of outsourcing 2. The cheaper the service, the more chances it is not compliant with regulations 3. Updates and later refining may significantly increase the total cost of ownership (TCO) 2 Increased speed and bandwidth in deployment 2 Additional control of changes is required, which need additional investments 3 Better support for innovation 3 A non-trivial process of adapting to the cultural and organisational changes dealing with an external business in daily activities is not an existing custom in many companies 4 Enhanced technology capability 4 1. You are treating your own customers through the change that you do not fully control (since it is in the Cloud) 2. Potential lock-in with the Cloud provider 3. New brokering role for integrating the work with different Cloud providers 5 Meeting regulations and local laws worldwide (a backflow of requirements from the Cloud provider caused by those laws) 6 Having and retaining the new skills team 7 Struggling with a mode of irresponsibility in the IT and business teams (aka they [Cloud] will figure out how to do this ) 7

8 In the following section we will elaborate on our recommendations to Cloud clients on what should be mentioned in Service Contracts with Cloud providers. These recommendations aim to protect Cloud clients via contractual agreements with Cloud providers. Recommendations for Wording in Contracts with Cloud Providers In essence, Cloud is IT, but it is not your IT any more. Corporate business cannot manage it in the same way as it used to, but many still do not grasp this. One of the most simple aspects of this fact is that when a corporate business asked its internal IT to do something, there was previously no need for concern about the Data Protection Act 1998 and MiFID / SYSC rules (where relevant) in the UK, or the USA Patriot Act (2001), because the company usually had gone through the appropriate compliance adjustments already. But with the Cloud, you do not know what you are getting. Moreover, you do not know how security is implemented by the Cloud provider and whether it is good enough for you, as well as which laws and regulations that you have to adhere to are preserved by particular Cloud provider. Some of these SYSC rules are not easily workable in the Cloud for example, if an application for managing your investment portfolios is a SaaS, it is outside of your control. Here are a few other dangerous examples of wording that drift from Outsourcing Service Contracts into the Cloud Service Contracts: 1) the outsourcing agreements frequently use statements like Good Industry Practice, reasonable skill and care. While the meaning of reasonable is unclear in software and services, but can be defined, an expression Good Industry Practice means nothing because such a practice does not exist in the Cloud yet; 2) the outsourcing providers usually push certain limits on their liability regarding losses of client s data or client commercial losses caused by latency or quality. Such limits cannot work in a Cloud, especially if the only purpose of contracting the Cloud is to eliminate the data and time losses; 3) when outsourcing started to move away from the fixed cost contracts, an idea of anticipated savings for the clients vanished as well. For the Cloud, a financial saving is one of the major buy in reasons for clients and if this saving does not materialise, it is an obvious loss that may not be excluded from the Service Contracts; 4) the only way the Cloud is accessible is the Internet (in contrast to outsourcing). For the last five years, the Internet had several incidents or global failures that impacted regions and businesses in them [10]. If Internet-related potential issues like availability, accessibility, performance, etc., are excluded from the Cloud Service Contract, you may consider that you have no contract at all; and 5) finally, since Cloud clients work in a Service-Oriented Ecosystem [4], they are responsible to their consumers for offered products and services. The clients do not care if something in the Cloud did not work as it should; the Cloud client company risks losing its goodwill and reputation because of the Cloud results. There is no evidence so far that Cloud providers offere any compensation to its clients for such losses. To conclude, we can outline that Cloud providers do take seriously some obligations on providing a 8

9 certain quality of service, performance, work meeting standards and policies, but all these will be based on the Cloud provider s terms, the use of the provider s standards and policies, especially in the Public Cloud sector. The clients of only the Private Cloud have a chance to avoid this provider world and return to the normal market; clients of the Public Cloud are foredoomed to consider if they want to use such a Cloud. There is a principal difference between Cloud services and regular Business Services. It is that the latter offers its own capabilities to the clients while the Cloud SaaS and PaaS can contain assets owned by the clients. Only IaaS offers capabilities that clients do not own; only this type of Cloud may be really compared to SOA. In the rest of this section, we would like to offer you a check-list of issues and topics that better be addressed in a client s Service Contract with a Cloud provider. The explanations of the issues and topics are intended to protect the client from potential contractual and operational risks caused by conducting a business with and in the Cloud. Topic 1. The Principles of Relationship, which a Cloud client has to establish in all negotiations and Contracts with a Cloud provider, include as a minimum: a) Preserve your own business and technology interests above an availability of Cloud services; if you do not find a suitable service today, you ll find it tomorrow literally, just do your research with due diligence. b) Do not accept compromises because you will not have control over them in the future (the Cloud is not your IT). c) Turn a Cloud market into a client market and behave respectively. d) Avoid provider locking by all means. Always be aware of competition in the Cloud market and inform the potential Cloud provider about your awareness. Construct the Contract in a way that you would be able to replace the Cloud provider at any moment you need; never give up your business flexibility because of technological difficulties. e) Always leave the control over interactions with multiple Cloud providers (which you might need) within your company because nobody cares about your business more than yourself. f) Approach all deals with the Cloud from the side of your business and technical risks. Gaining a little money for a cheaper solution at the beginning and losing much more by the end is a gamepattern for dilettantes. Topic 2. Invest in an understanding of the difference between Public and Private Clouds, especially in corporate top management. Note that a Hybrid Cloud is a masqueraded Public Cloud. Consider this when contracting a Cloud. The smaller a company, the more it is inclined to accept a high risk for gaining more technical capabilities. The larger a company, the more it persuades paying a little extra for Private Clouds for reducing uncontrolled risks of the Cloud. Topic 3. The procedure of checking the Cloud provider s background is different from such checking for other vendors of your company. Just asking the question How long have you been in business? does not work for Cloud providers all of them are new to the business because the business is still in its infancy. You have to apply the same checking methods and criteria that you would use to choose a collaborating partner. When you put your data and systems (tailored for your business) into a Cloud, you give away a part of your company. Even if you still own them, you have only a de jure ownership while de facto there is an additional proprietor in the game. The 9

10 level of your trust may be reflected in the Contract; nothing must be wrong with it. Topic 4. Business Continuity of your company, including all technical SLA characteristics, is the key to all detail of the Contract with a Cloud provider. Your business must be clear about what would happen in a case of outage for a particular Cloud (see example at [10]) or if your Cloud provider is being acquired or goes under an administration. A good provider usually protects all its systems (electricity, cooling, computers) via 100% functional redundancy for its own DR, but this is only the good provider. In other words, no Cloud solution may undermine the DR of your organisation. Make sure the detail of the back-up offered by the Cloud provider is in your Contract. Topic 5. Identify the assets you suggest to deploy in the Cloud and verify them from the business risk perspective. Business risks must include, first of all, a rainy day scenario, in other words your company should be ready at any moment to go without assets deployed with a particular Cloud. You have to have a mitigation plan for such cases despite the cost (if the risk is realised and you do not have a plan, you ll pay much more). This relates not only to your applications and data, but also to all infrastructure, applications and data you might lease from the Cloud, for example, from IaaS and SaaS providers. Topic 6. Make sure that the Cloud you choose guarantees compliance with all regulations that your own company is under. Also, make sure that this Cloud does not bring more foreign regulations than you care to deal with. For example, in the majority of EU countries, privacy of personal data is preserved by the governments, while the USA s Patriot Act allows the USA government to obtain your personal data from the businesses that are under US jurisdiction. So, if your Cloud provider is an American company or if it stores your data-in- Cloud in computers in the US, this provider is obliged to release your data to the US government without your consent. This requirement of Cloud compliance relates also to the policies on updates and upgrades of both your assets in the Cloud and the Cloud s platforms themselves. Your Contract has to state clearly: 1) the maximum latency a Cloud provider guarantees to implement any updates and upgrades that your company requires; and 2) what impact on your company might be caused by any updates and upgrades initiated by the Cloud provider. Topic 7. Consider a commodification of Cloud services. When you think about a Contract with a particular Cloud provider for longer than one year, you have to remember that the trends in the Cloud market may change in that period of time. For the next several years, it is expected that the quality of Cloud services will increase while the cost decreases. It would be wise to reserve a re-evaluation of your Cloud service, including the provider itself, in the current Contract. This means that one of the conditions for contracting a Cloud service is that the service provider has to agree to review a market competitiveness of its own service for you after 10 months, for example. Also, if you are dissatisfied with the review results, you should be free from any penalties for terminating the Contract with this provider after 12 months of execution. For instance, if you think about a 36 month Contract, there may be two review points on the 10 th and 22 nd months. Topic 8. Require visibility into your assets in the Cloud ondemand make sure this is a clear statement in your Contract. It means that you as a Cloud client should be able to find out, at any moment, where your applications and data are situated, who has access to them, who actually accessed them and 10

11 when, how the SLA has been preserved, and when the modifications that you required were actually applied. You need this visibility to meet the requirements of those who audit your company. You might have no such visibility if you use a Public Cloud, but you should be aware of this condition before you sign the Contract. If a provider of a Private Cloud cannot deliver you the required visibility, you can suspect that this Cloud is either not mature enough for you or not a real Private Cloud, that is to say it uses a Public Cloud somewhere in its network, but did not disclose this fact when the Contract was made. Beware that if a provider uses a so-called Cloud Federation to serve your Contract, every element of this Federation must be compliant with your Contract including a Public Cloud if used. Topic 9. Verify that your Contract specifies that the Cloud provider may not use any third party whose requirements to identity and access controls are weaker than the ones you establish between your company and this Cloud provider. The latter may be engaged in network communications with other Cloud providers in a form that may affect your data and applications hosted by this Cloud provider. If security of those communications is weaker than you would consider for yourself, be aware this might constitutes an additional risk for you. Even if your Cloud provider assures you that the aforementioned communications are under control of a trusted authority like an inter-cloud Identity Management System, this does not mean that you must trust this authority and rely on its protection; you have not evaluated and chosen this authority and its credentials may be OK for the Cloud provider, but not for you. Topic 10. Unification and standardisation are good for assembly business like conveyer that uses many standardised parts to compose a thing. For many others businesses, it is very often that the uniqueness of your operations and systems have enabled your success. Remember that the more typical your business needs are, the easier for the Cloud provider to satisfy them. Therefore, the Cloud providers will consciously or subconsciously try to squeeze your uniqueness into a unified typical format. Do not allow the tool to drive the business; it should be the other way around. Topic 11. When signing policies, processes and procedures of interactions between your company and the Cloud such as, for example, a deployment process into Cloud or a failure recovery, consider business cultural aspects of your company. This will help to avoid significant resistance of your own personnel that will work with the Cloud. Topic 12. Give special attention to the performance, availability and accessibility of Cloud-based products, including your own assets in the Cloud. The Cloud performance, as recent researchers have shown, is the major client s concern nowadays. Watch for integration between availability and accessibility characteristics in the SLA: a system may be available but not accessible via the network. Monitoring of availability and accessibility characteristics is very important for your management of relationships with Cloud providers. Topic 13. Ask your future Cloud provider for a test-version of the offered Cloud service(s) that you will be able to use, to test your connectivity and interactions. This is needed for your current project and for your future projects that might use Cloud services from the same provider. You will need to be able to test your development with and in the presence of those Cloud services, instead of either having them in your Test Environment or paying for the real services for just a test purpose. Topic 14. Watch for fees (especially hidden ones) like the fees for an initial setup, ongoing consumption, 11

12 updates, status requests, bandwidth limits, number of users, recovery from failover or disaster, and alike. Also, the Contract has to define a cap on how much the provider may increase the rates and how the Contract termination options relate to this increase. A word of advice before signing the Contract compare the TCO of your existing IT resources versus an accumulated cost of the Cloud-based solution over a period of time of about 1 3 years; it is reasonable to suggest that your sunny expectations of financial saving may drop down to earth. Topic 15. You can consider a scheme of penalties that the Cloud provider should pay to your company in case of violation of the SLA. You can estimate your potential losses (per minute/day/week) caused by the Cloud service downtime, and request compensation from the Cloud provider accordingly. These losses may include not only the lost sales, but also the cost of increased support calls and mitigating operations on the side of your company, as well as the loss of your brand goodwill. Topic 16. A detailed Support Scheme is a must-have section in the Contract with a Cloud provider. Remember that the Cloud provider is a foreign independent business with its own internal policies and processes. However, a support is one of a few things that couple your internal business processes with the business processes of the Cloud provider. This is very sensitive matter, which, at the same time, may be vital for your business. Requirements to the Support Scheme should be adequately set with the operational model of your corporate business. Topic 17. An exit rule from the Contract with a Cloud provider has a specific that has not really been known in corporate practice before. If an employee leaves the company, the Employment Contract usually enumerates that the information media, which the person worked with, should be returned to the company; this is linked with the corporate rights on the information that was available to the leaving person. In a Cloud Contract, the aforementioned attributes are not enough. You have to specify the format in which data is to be returned; otherwise, the Cloud provider may return data in the format used in the Cloud and unreadable to you. You have to define the media, formats and configuration of the SW products you own/lease/license you have deployed in the Cloud. Especially, you have to define the procedure of the revocation of your SW and following control in the Cloud environment to confirm that the revocation has been completed and all licenses are returned to you. Overall, the Contract should not allow your current Cloud provider to postpone your exit date in reference to whatever technical difficulties you may be having. Conclusion Cloud Computing has entered a world of business and previous IT experience is not sufficient any more. This article offers a set of business and legal topics to be addressed in the Contract between the Cloud service and its client. The explanations of the Cloud Service Contract are presented in line with OASIS SOA RAF [3] specification and shows Cloud providers what business and legal topics their clients are already concerned about, and will continue to be concerned about. Cloud clients, in turn, can find a set of Contract matters that together can protect them from little-known problems with Cloud companies, and can form a basis for the inter-business, not business-technology, relationships in this new business domain of the Cloud. 12

13 References [1] Michael Poulin, Architects Know What Managers Don t. BuTechCon & Trobador Publishing. ISBN: [2] Michael Poulin, Jumping into Cloud, Be Sure You Know How to Get Out. ebizq BLOG. January, _get_out.php [3] [4] Reference Architecture Foundation for Service Oriented Architecture Version 1.0. Committee Specification 01. December, [5] Lydia Leong, Liability and the cloud. Gartner. [6] Commission Communication, Unleashing the Potential of Cloud Computing in Europe, COM (2012) 529 final on [7] [8] Cloud Computing The Rise of Service-Based Computing. Kemp Little LLP. January, [9] Cloud Computing The Rise of Service-Based Computing. Kemp Little LLP. New edition. January, [10] Bernard Golden, The Amazon Outage in Perspective: Failure Is Inevitable, So Manage Risk ge_risk?source=cionle_nlt_cloud_computing_

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