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Cloud Service Contracts Our expert lawyer tells you what you ought to look out for

By Frank Jennings, the cloud lawyer at DMH Stallard

Cloud means no software. Cloud offers flexibility and scalability. Cloud is cheaper and more resilient than on-premise IT. We’ve all heard about these – and little question other benefits of cloud too.

It’s very easy to start out using cloud services and to urge these benefits. you'll even bypass your CIO by using your Mastercard to shop for a cloud service direct. But does one check what you’re getting before you sign up? only too often, customers ask the really important questions after they need adopted the cloud.

Here is our FAQ of risks in cloud contracts that customers should be asking. And guess what? Reputable cloud providers don’t mind you asking.

1. Will the provider negotiate the contract?

This depends upon the sort of cloud. For public cloud, probably not as it’s a highly standardized generic service – it either does what you would like otherwise you go elsewhere. But with private and hybrid cloud or were you handling a reseller, you'll and will negotiate.

2. What service guarantees will the provider make?

With a public cloud, you'll generally get a multi-tenanted solution where you and other customers share space on the provider’s infrastructure. It won’t be tailored to your exact requirements therefore the provider’s promises are going to be restricted. While the provider may promise that the service will suit its published specification and SLA, you ought to expect statements that the service is provided “as is” with exclusions of any useful promises about it being fit your specific purposes. Or that the standard of the service is going to be satisfactory for your needs. Again, with private / hybrid/resellers you'll specify a greater degree of tailoring and you ought to negotiate these warranties too.

Reputable cloud providers don’t mind you asking [the right questions]

3. What risks does the customer bear?

Remember, the customer is ultimately liable for data security and compliance and therefore the Information Commissioner or FSA will fine the customer for breaches. If you would like your data kept within the UK or EU, check the situation of the provider’s primary and secondary data centers, and don’t forget to ask where their call center is. If you would like back-up or failover, don’t assume these come as standard. If you would like your data encrypted, are you liable for this? If the info is lost, are you liable for recovering it? Has the provider limited all their liability to the fees you’re paying them (or, as above, to service credits only)?

4. What should I look out for?

Does your provider have an honest reputation? Do they need any accreditations, like ISO27001/9001, or conform to the Cloud Industry Forum’s Code of Practice? These take time, money, and energy and show that the provider has an eye fixed on the customer’s interests. Do a credit check on them. Do they own the info center or buy space from someone else? Is it Tier 3 and above? are you able to “step-in” to the contract if your reseller goes bust? Can the provider post new terms or prices on their website by simply emailing you?

5. am I able to sue my cloud provider for a service failure?

Typically, the customer will bear the brunt of a public cloud service failure. Check the SLA – it'll probably say your “sole and exclusive” remedy is service credits on an hourly or day today and you’ll need to claim these because the provider won’t automatically give them to you. If your cloud service is down for each day, service credits generally won’t amount to any use anyway. Again, with private / hybrid/resellers, you'll often recover protection. You get what you buy, after all. Some providers are so certain of their resilience, they're going to even indemnify the customer for data loss. But, be careful: anyone can found out a cloud service. It doesn’t mean they need any capability. Or money.

6. How do I modify the provider?

If you’re dissatisfied with their service, you'll be ready to end the contract for service breaches – but see the warnings above. Otherwise, you’ll need to terminate by giving notice. Often cloud contracts are for a minimum period so check whether this has elapsed. confirm you give notice in time to avoid an auto-rollover of another 12 months.

7. Is insurance worth getting?

Insurance for cloud outages and data losses is at an early stage, but you ought to definitely speak to a broker. Of course, even the simplest insurance cover isn't a substitute for taking practical steps to minimize the likelihood of wanting to claim thereon.

8. Can a lawyer provide any guidance on this?

Of course, but make sure your lawyer really knows cloud. for instance, confirm they’re conversant in the Cloud Industry Forum’s best practice contract recommendations. You wouldn’t attend your GP for operation, so think twice before using an equivalent lawyer who drafted your Aunt Mabel’s will.

You Need Cloud Orchestration

By Tony Lucas, Founder, Flexiant

The cloud services market is during a transitory phase. We are witnessing the weakening of the argument that states that individuals or companies got to own and manage their own computing resources.

Increasingly, these individuals and corporations will address cloud-based utility services to urge the work done. Gartner and IDC both predict significant public cloud growth. Gartner predicts that public cloud services will grow from £109bn in 2012 to £206bn by 2016. IDC’s prediction is that spend on public cloud services will grow at a rate five times greater than the typical increase in IT spend.

The opportunity for cloud service providers is critical, but these organizations need how to market margin and revenue growth opportunities by having the ability to supply a differentiated end-user experience which helps to extend the cloud platform consumption. Organizations can then specialize in growing their business, rather than dalliance on repetitive and reproducible activities enabling the main target for more complex, value-added services to be developed.

The clock is ticking for cloud service providers; the time is now for these cloud service providers to prevent hemming and hawing over what new cloud technology to deploy and instead act now to remain before the competition. this is often the last decade of the service provider and if new technology isn't adopted, revenue opportunities are going to be lost.

In reading David Terrar’s post on a number of the challenges for cloud ISV CTOs to beat, one of the challenges I particularly agreed with was the recommendation on not developing it all yourself. David writes:

[quote_box_centre]” Don’t develop it all yourself. In the past, the standard software company would have developers who thought they might roll in the hay all. The perception was always that it might be cheaper to create the network or billing system or customer forum precisely the way we would like it to figure instead of buy. the top result was an entire load of bespoke software to support to run the business with limited functionality and no best practice. The smart development teams know what they're good at and stick with it.”[/quote_box_centre]

Corporations are looking to consider what they are doing best. the celebs are aligned for service providers to capitalize on this chance, but having the capabilities to supply the orchestration businesses require presents a challenge. this is often where cloud services providers got to stop looking to develop bespoke solutions and instead harness the advantages of proven, mature, and reliable cloud orchestration solutions.

Cloud orchestration software can help by managing all elements of a cloud platform; physical and virtual resources. It allows organizations to show traditional hardware into a cloud platform by automating and streamlining the deployment while managing and provisioning those resources appropriately. This way, service providers get the foremost from their investments and exploit the expansion opportunities of cloud services.

With that in mind, Flexiant has today announced its latest version of Flexiant Cloud Orchestrator V3. With V3.0, the whole range of cloud service providers including traditional hosting companies, managed service providers, telecommunication companies, and new entrants to the cloud services market can create a cloud services business that customers love.

What Info-Tech Research Group Thinks

Named by Info-Tech Research Group as a Cloud Management Trendsetter in its “Vendor Landscape: Cloud Management Solutions” report, Flexiant was evaluated against nine other competitors including Abiquo, CA Technologies, Citrix, Eucalyptus, Nimbula, OpenStack, Virtustream, and VMware. Flexiant was rated the leading innovator and as an answer of choice for service providers or indeed anyone, like hosting companies or telco, which wants to create a cloud services business quickly instead of building an internally focused enterprise cloud.

The “Vendor Landscape: Cloud Management Solutions” highlighted Flexiant’s strengths including standout dashboard customisability, flexible and integrated billing capabilities, quota and permission management, and alerts tied to resource utilization and versatile deployment options with multi-hypervisor support.

Flexiant Cloud Orchestrator

Flexiant Cloud Orchestrator V3 offers a cloud orchestration solution for on-demand, fully automated provisioning of cloud services. the newest version combines Flexiant Cloud Orchestrators previous capabilities – multi-cluster support, across multiple locations and geographies, all managed from one pane of glass portal, multi-hypervisor support, granular metering and billing, highly configurable interface, roll-based access control, an in-depth API and reseller capabilities – with new features to increase the provisioning of resources to the appliance.

New features include:

Bento Boxes, Flexiant Cloud Orchestrator’s functionality for delivering pre-configured application provisioning, allows service providers to supply pre-packaged, pre-configured, and complicated application stacks that are able to use.

SmartFilters gives users the power to trace both virtual and physical resources consistent with business needs and requirements in a way that creates sense to them.

V3 offers scalability assurance.

Flexiant is additionally announcing its Universal Storage Solution (USS) which removes the storage compatibility headache.

Support for the Hyper-V (2012) hypervisor.

Flexiant Cloud Orchestrator V3 further supports service providers, traditional hosting organizations, and telecommunication companies with a cloud orchestration solution that's reliable and mature at a compelling price point. Flexiant now offers four new cloud management software editions to offer companies of all sizes access to Flexiant Cloud Orchestrator V3. It offers traditional hosting companies an alternate orchestration solution that works while providing an upgrade path to advanced functionality currently experienced within the service provider market.

What Our Customers Say

Selected by Cartika, a pacesetter in application hosting and advanced clustering technologies, Flexiant Cloud Orchestrator V3 will provide the cloud orchestration solution it requires internally and to satisfy its customers’ expectations of a more automated and versatile solution.

Andrew Rouchotas, the CEO, Cartika, explained, “We knew we would have liked a cloud provisioning platform that might enable us to supply enterprise-grade solutions, help us differentiate against other service providers which would also support both our current and future business strategies. We discussed internal development, but the time to plug was prohibitive. After watching several vendors, it became obvious that Flexiant was clearly a more mature and stable software solution than anything available. Flexiant’s product is head and shoulders above the alternatives. We were impressed with its robustness and simple deployment and also the service delivery team’s ability to satisfy our bespoke needs.”

Richard Parker, Market Development Director at ITEX explains, “ITEX originally began a roll in the hay yourself type project using existing technologies and located after a variety of months that the quantity of effort required to create a strong cloud platform that would stand the scrutiny of alright informed clients was quite undertaking.Big Blue wants You!

By Luke Wheeler

Compare the Cloud were invited along to IBM’s European Analyst and MSP Influencer Forum event on Tuesday. information technology degree As you would possibly expect from the US’ second-largest firm – it had been a well-drilled affair, an action-packed day of presentations, workgroups, networking, acronyms, and occasional.

The big announcement – around which the day was constructed – has now been well covered well by the IT industry’s mainstream news channels, so we won’t delve too deeply into the small print here, but to sum it up in one over-extended sentence:

IBM recognizes the worth of Managed Service Providers (MSPs) as a primary route to plug for sales of IBM products and services to the “mid-market” sector (sub-1000 employee companies) – and have subsequently created a selected MSP program called “PartnerWorld” – which offers a broad range of partner benefits encompassing the supply of the product, technical and sales support, marketing and business development, leveraging of the IBM brand, and financing.

To the credit of the Mid-Market team at IBM, there are certainly some interesting “beyond hardware” initiatives within the program, and MSPs should certainly take an honest check out it. IBM invests $2bn a year in their partner channels and has reportedly recruited >1400 MSP partners this year thus far – so they’re certainly committed.

IBM invests $2bn a year in their partner channels…

It’s not a day you get invited into the hospitality of the world’s third most precious brand* and obtain to satisfy numerous key influencers, so as Compare the Cloud we felt there was a requirement to delve a touch deeper into the strategy of IBM and what this might actually mean for the united kingdom and Europe’s Small and Medium-sized businesses (SMBs)…

The first take-away positive for us was the very fact that IBM realizes that the character of their channel has changed. IBM does indeed recognize there are different computing requirements and engagement levels needed for various sorts of partners – whether or not they be MSPs, Independent Software Vendors (ISVs), systems integrators, Value-add Resellers (VARs), Telcos, Cloud Services Providers (CSPs), etc. – and are re-organizing their channel strategies accordingly.

The second takeaway for us was that IBM does understand that the market is contracting for his or her primary revenue sources: traditional product sales (hardware and software) and Professional Services – which are being off-set with growth in demand for Managed Services, Maintenance and Application Hosting.

So the big news here is that IBM knows what the Mid-market / SMB sector wants and that they now have formulated a technique to best deliver it.

But what's “it”? What does IBM have that the SMB wants? We heard ourselves asking.

Well, we have an expansive portfolio of products and services”, came the reply.

And indeed, they do… but perhaps communication around specific products, technologies, and their benefits must take the central stage during this initiative of addressing the mid-market?

It’s evident from IBM’s strategy that the MSPs and channel partners are going to be relied upon to cherry-pick the proper IBM products for their customers, alleviate any perceived complexities, and to re-assure end-user SMBs that IBM’s products and services are indeed better than the competition and price paying a premium for. IBM clearly has an idea for educating their partners for the top-down approach, but what about the bottom-up approach and delivering winning messages to the end-user SMBs (such that they then address their suppliers and demand IBM products and services)?

What products does IBM have that are useful and relevant to SMBs today?

On behalf of the SMB and Mid-market sector, Compare the Cloud would really like to explore that question in additional detail: What products does IBM have that are useful and relevant to SMBs today? For us, that’s the $24.1bn** question.

With an annual investment of $6bn in R&D and 6,180 patents to their name, IBM must have some great technology – technology that the SMB can enjoy.

Of course, IBM has some excellent products and services within their expansive portfolio, but as an SMB (and maybe even as a channel partner) you'll easily be forgiven for not knowing exactly what they're and why they're better. The IBM website isn’t particularly enlightening either – sure it's great and therefore the proper of data is there – but am I being asked to shop for into the IBM brand or a far better product? As we all know, the brand itself is worth an excellent deal – but to the Mid-market and SMB – we’re pretty sure in most cases they’ll want the higher product?!

So, politely we laid down the gauntlet and challenged IBM to exit (of their Ivory Tower) into our (Pie ‘n’ Mash) arena to elucidate the benefits of their key products and services to an informed and eager SMB audience.

The challenge is about. technology credit union's initial response has been positive. we glance forward to checking out what’s under the hood – and whether SMBs will want Big Blue.

*According to Interbrand (2012), the IBM brand is valued at $75,532m, behind Coca Cola and Apple.

*Around 20% of its $107bn annual revenue comes from the channel. great for starters.

10 challenges for the Cloud ISV CTO to beat 

Back in April, I used to be asked to try to to the keynote session for an occasion aimed toward Independent Software Vendors with the title “5 Key Challenges for the Cloud ISV CTO and the way to Beat Them!”. The audience were software developers either considering moving their applications to the Cloud or who had just started that journey. Actually, it had been a struggle to select just 5 then I made a decision to revisit the subject and highlight 10 issues here. These challenges for a developer translate into the characteristics for a better of the breed Cloud application. for somebody on the buy-side trying to find an answer your shortlisted provider might not have all of those ingredients today, but watching the corporate, their solution, and their product roadmap from this standpoint will offer you an honest understanding of how innovative and forward-thinking they're. This list should form a part of the due diligence on your selected vendor.

Recognize that we’re not in Kansas anymore. There are many IT people within the industry who have decades of experience in technology life cycles and believe that everything that goes around comes around. This Cloud stuff is simply like those centrally hosted mainframe bureau systems of old but with new marketing labels. Wrong! have you ever read Douglas Adams's great book Dirk Gently’s Holistic Detective Agency? Like Dirk, I think within the “fundamental interconnectedness of all things.” I’ve lived through the transition from mainframe to mini-computers to distributed PCs and Group-ware. From Open Systems (which really meant UNIX) to client/server and therefore the first wave of the web and Web 1.0. Each shift meant an enormous technological change and a few major players did not survive each transition. Today is different. Today we've three shifts, each easily as significant as those I’ve just listed, but they're happening simultaneously – the shift to Cloud is occurring at an equivalent time because the shift to Social at an equivalent time because the shift Mobile.

The technology landscape has changed forever. We’re not in Kansas anymore, and it affects everything. Look carefully at your Cloud provider. There are two types – those that are retrofitting existing IT into the Cloud – that’s fine and it gets a number of the advantages, but it’s old-fashioned wearing new clothes. The cool companies get what went on. they're embracing the new paradigm with multi-tenant, public Cloud technology that helps customers adopt new business models, collaborate with their customers in new ways, and make use of their data in ways in which weren’t possible with old IT systems. Which approach are you looking at?

The consumerization of IT and therefore the user experience. old style font software was complex, demanding training courses and expert help to implement it. Amazon and websites love it, have shown us that you simply don’t need a training course to put an order for a book. the quality of permanently website design remains Steve Krug’s book “Don’t Make Me Think!” – the provider must take that mentality into their business solution. Modern Cloud application providers got to put the user experience and user testing “front and center” of their design philosophy. Way back in 2006 I met Richard Moross the founding father of Moo.com, the card people. I asked him what was the foremost significant investment in fixing his company. He answered immediately “the £10,000 I spent with Flow Interactive performing on the user experience of the website”. It shows because making cards on Moo is fun and I’m far more likely to recommend them to my friends because I enjoyed the experience. Their competitor Vistaprint is spending heavily on TV advertising, but they’ll fail because their website is user-hostile! Moo’s usability trumps it. That frictionless and fun work-flow is what you would like in your business solution. User experience is paramount and you ought to search for Cloud app providers who think that too.

The whole business model must change from end to finish. A software company converting from selling the old-style font, on-premise, software licenses to a Software as a Service subscription model has got to change every part of their business. They compensate their sales team in several ways, and that they market and sell differently. They implement the answer differently, starting with a little pilot then rolling out the answer to more and more users only after it's been proven to achieve success. they supply better documentation, more self-service training, and support. they supply software releases quarterly or even weekly instead of a “big bang” upgrade every 18 months. they're going to be far more transparent about their product roadmap and supply better ways for patrons to urge involved and influence product direction. Their emphasis shifts from great selling to great on-going support as customer retention to create up recurring revenue becomes the business driver. They manage and monitor their business differently. trying to find these characteristics will assist you to pick the providers who have embraced the new Cloud paradigm properly and moved on from the old-style font software companies who may be retrofitting legacy client/server software into Cloud infrastructure.

Go Agile. Agile software development may be a group of software development methods supported by iterative and incremental development, where requirements and solutions evolve through collaboration. the important Cloud providers have adopted this approach, involving their customers within the process, and convey out regular, incremental releases. they're going to organize into small teams and consequently get far more done. Search for companies who have moved on from the old methods of developing software.

It soon became evident that the work and resource involved was impractical. ITEX went bent the market to re-evaluate the commercial platforms available and selected Flexiant for its flexibility, simplicity, scalability, and affordability. information technology degrees

 the power to watch and bill on a really granular level to its client base was of paramount importance to ITEX, yet it wasn’t a feature it had seen in other systems.”

Over the last year, Flexiant has gained significant momentum within the marketplace. With two new versions of Flexiant Cloud Orchestrator, new licensing editions, named by Info-Tech Research Group as an innovator and trendsetter, customer endorsements, Flexiant is certainly a corporation on the move and one to observe.