Vendors who provide cloud computing capability, like technology vendors in a traditional distribution model, are often focused on issues such as protection of intellectual property rights and limiting liability. However, there a number of issues that are particularly unique to cloud computing vendors. Further still, there are specific issues companies may consider when dealing with cloud computing vendors since cloud computing, by its nature, involves the use of software and hardware that are not located on the customer's premises and remain under the control of the vendor. This column highlights some key issues to consider in cloud computing services agreements.
One of the key issues for a cloud computing vendor can be summarized generally as the service level the vendor is providing to its customer, which is usually set forth in service level terms that can part of the cloud computing agreement or in a separate service level agreement that is incorporated by reference. Some of the considerations in developing service level agreements are as follows: