According to a 2018 Gartner study, the public cloud market will grow by 21.4% in 2018 alone, accounting for more than $186 billion in revenues for the IT industry. In three years, the total revenue for cloud computing services is expected to exceed $300 billion–a number many would consider relatively conservative.

Whether it is software-as-a-service (SaaS), business-process-as-a-service (BPaaS), infrastructure-as-a-service (IaaS), or a combination of the three, cloud computing has become an integral part of the overall information technology strategy for many enterprises. This is why it is so important for every organization to develop an approach to hiring cloud services that includes a clear definition of what is expected–from both sides of the agreement.

SEE: Special report: How to choose and manage great tech partners (free TechRepublic PDF)

Get it in writing

While the power and flexibility of contracted cloud services is obvious, there are also concepts like reliability, scalability, and confidentiality to consider. From a business enterprise perspective, a cloud service that can’t be accessed and used as expected might as well not exist at all. Cloud service providers must provide assurances and even financial guarantees that their offered services will be available when needed.

On the flip side, enterprises hiring cloud services must have a clear understanding of exactly what services they will need and what loads they will put on the system. Suddenly demanding services that were not contracted for will often tax a system in unpredictable ways, increasing the possibility of downtime and service outages.

SEE: Cloud computing policy (Tech Pro Research)

The answer to this two-way negotiation is the service level agreement (SLA), which should outline in great detail exactly what services are offered and what services will be requested. The SLA should include details like exact timing, guaranteed variables, mutual responsibilities, incident report procedures, change request procedures, and billing specifics.

In an era where cloud services play a strategic part in an enterprises overall business plan, the SLA could be considered one of the most important documents a business will ever negotiate. Having a clear and comprehensive foundation for negotiating and developing each SLA for your enterprise might be the difference between success and failure.

Our premium sister site, Tech Pro Research, offers a Service level agreement policy you can use as a framework for developing your own enterprise-specific SLAs. Reliable, scalable, and flexible cloud computing services in some form are standard operating procedure for most enterprises these days, and a documented plan of action defining how an SLA should be negotiated is a must.

Your thoughts

Does your organization have documented procedures for negotiating with cloud services providers? Have you ever run into problems with a provider who didn’t meet its stated guarantees? Share your advice and experiences with fellow TechRepublic members.

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