May these Public CloudTracting Paradigms Assist You in Your Next Public Cloud Contract Negotiation!

I have been looking at or negotiating public cloud contracts – or what I call public cloudtracting – since this offering started being around.  In that span, I was lucky enough to be involved in deals on all sides of the negotiation table – for customers, integrators, subcontractors and – since 2018 at #Googlecloud – for a public cloud vendor.

For enterprise customers, negotiating a public cloud deal can be a daunting task. First, entrusting a global public cloud provider with your organizations’ most sensitive data or critical workloads is no small matter. Extreme prudence and care are required. On top of that, many enterprise customers of public cloud providers are not fully familiar with the intricacies of public cloud platforms, their security and operational aspects. This is quite normal. Even after two years at Google, I am just beginning to understand the full awesomeness of these constantly evolving technological platforms.

As I negotiated public cloud deals over time, three “master principles” or “paradigms” slowly emerged in my mind as I repeatedly discussed similar customer demands – and their corresponding objections – at the negotiation table. While these three paradigms may not provide answers or guidance on each and every point discussed during a cloud negotiation – some items are, indeed, purely commercial – I believe that they do provide sound high level guidance to parties negotiating a public cloud deal in a vast array of circumstances.

The three paradigms are discussed separately below. May they bring peace and harmony to your forthcoming public cloud negotiations or as I like to call it, Public CloudTracting Concordia!

One Same Cloud For All

True sophisticated public clouds out there are, by design, necessity and definition, standard multi-tenant platforms. These platforms are therefore essentially the same for all users – including in many cases the public cloud providers themselves, many of which use their own platform to conduct their business.

This raises a unique and compelling consideration when it comes to negotiating a public cloud contract. The platform being the same for all, any operational aspects of the platform or of the resulting services cannot as a general rule be modified for a specific customer.  Whether one is talking about security, SLAs, data processing, data location, how it works, etc., the platform is what it is and it cannot, as a rule, be modified. Obviously, customers may make choices in their use of a platform or its services, but the underlying products, designs and processes are what they are and cannot be changed from one customer to the next.

As a result, making changes to cloud contractual documents having an impact on the cloud’s operational aspects usually will not be possible. Public cloud vendors provide one platform and make it available to thousands – or millions – of customers. It is the same for everyone, and it cannot go into hundreds of different directions to accommodate customer preferences. You would prefer that the cloud provider meet different certifications? Sorry, we are not there yet. You want the provider’s cloud to meet your own security and data protection requirements? Not possible, but please look at our security. You would prefer functionality XYZ to rather work in a certain way? Let us see if we can make it part of our general product roadmap for a global release next year, but we cannot do it now for you, etc.

To recap, with respect to everything operational, it is therefore key to understand and remember that the technology “drives” the paper, not the other way around. Stated differently, the contractual documentation is really meant to explain and describe how things work for everyone. Not to influence or change how the services are powered or provided or could be modified. The platform is what it is, hence the critical importance of picking the right public cloud provider from the get go.

A Public Cloud is a Moving Train of Relentless Innovation

My second paradigm turns around innovation. One of the greatest asset of public clouds is that they offer their customers (essentially) free and constant innovation. Public cloud providers continuously allocate massive amounts of resources and brainpower to continuously innovate and offer their customers better, faster and more powerful services. New products are not built to specs, but rather constantly improved to provide the newest and most fantastic functionalities and meet the next use case as soon as possible, for all users. Here again, the cloud platform “drives” the paper, and the contract must therefore be a flexible tool enabling this constant and relentless innovation – not preventing it.

That is why you will find several portions of public cloud contracts that the provider is empowered to modify unilaterally over time without the customer’s consent (within reasonable boundaries, obviously).  Services descriptions and functionalities, terms dealing with data security and location options, operational services and contractual terms and the likes are examples of areas of a public cloud contract package that will reserve sufficient operational flexibility to the provider so that it can keep its platform constantly evolving for its entire customer base. By implication, customer demands for “opting out” rights, vetos, or an ability to delay a technological evolution cannot be accommodated as a general rule.  Likewise, trying to “reduce” or “limit” a public cloud provider’s right to modify certain operational contract terms cannot realistically be entertained. It is the same platform for everybody. Therefore, it is changed the same way for everybody at the same time. You are on the same moving train as everybody else and this train usually does not stop or change course for any particular customer.

Stated differently, the tradeoff for free and constant innovation is the loss of control, which has ripple effects all across the contractual documentation.

Customer Empowerment … and Responsibility

The last fundamental principle of public cloudtracting is that customers must appreciate and embrace the fact that in a true sophisticated public cloud platform setting, they pretty much control and continue to be solely in charge and responsible for their operations and data. Customers are in charge, and they decide how their cloud will run.

Using a public cloud does not mean that a customer can shift its existing business risks to the provider. In fact, selecting the right provider is a customer’s way of mitigating its existing business risk – whether it pertains to data security, agility, business continuity or otherwise. But once that choice is made, a customer keeps control of the levers enabling it to optimize – or not – its operations and the security of its data. For example, an established public cloud provider will empower its customers to configure its services in accordance with the security levels, controls and processes that they desire. But for the most part, customers remain responsible for these choices and for implementing these correctly, using the provider’s platform.

If liability results from their operations or data, customers must remember that they usually “own” this – and conducting that business on a public multi-tenant infrastructure in fact requires customers to take responsibility thereof vis-à-vis the public cloud provider. Public cloud providers will try and assist their customers thrive using their platform. But they do not have true visibility or any control on their customers’ operations or data; thus they cannot take responsibility for their customers’ business outcomes.

The key here is really to carefully select the right public could provider, based on the provider’s record of accomplishments and the trust you can put in its key stakeholders. Making the right choice early on will go a long way in enabling customers to optimize their operations and will empower them to properly manage their business risks.

Conclusion

Next time you engage in one form or another of public cloudtracting with a leading public cloud provider, keep in mind the three following paradigms: (i) the platform you are looking at is the same for all customers and cannot be changed to accommodate your specific needs or preferences, (ii) that platform is continuously changing and this relentless flow of innovation cannot be opted-out of, delayed or influenced much, and (iii) embrace all the power – and the ensuing responsibilities – that a public cloud platform will offer you and do not minimize the importance of preparing and planning for your voyage to the cloud; up-front investments will enable you to reap the desired rewards later on – or as the saying goes, the more you sweat in practice, the less you bleed in war.