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CLOUD SMART

“Are you in control of cloud costs and risks?” – if yes, you are probably the only one. By outsourcing your infrastructure or applications into cloud (IaaS, PaaS or SaaS) will make life easier for your IT department, but it is not true from the perspective of your costs and risks.


Inability to scale-down, inability to transfer your rights during divestiture or sudden pricing changes after term of the contract are just some of typical scenarios we can see. Business needs are quickly changing and cloud contracts may be more rigid than your on-premise infrastructure. Through our Cloud Smart Services, we will review your Cloud and SaaS contracts and propose changes to increase your flexibility while minimizing risks. We can also help you to identify your current usage to immediately cut your over-license spending on SaaS.

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EXECUTION PLAN

  1. Perform 360-degree review of the contract for your specific cloud solution (IaaS, PaaS or SaaS).

  2. Identify risks (e.g. uncapped maintenance costs growth) and reveal gaps (e.g. inability to transfer the service to divested legal entity) and propose adequate solutions. Discuss priorities and urgency to resolve gaps with stakeholders.

  3. Perform software usage metering to measure over-licensing and find possible ways to minimize it, including contractual adjustments.

  4. Re-negotiate your cloud contract with the vendor either actively (to act on behalf of your organization) or passively (recommend strategy and providing guidance)

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ASK YOURSELVES...

  • From legal and license management perspective, what do you think is easier – run your infrastructure and software on-premise or in cloud?

  • Have you a contract management system in place? How well you know your cloud contracts, your rights and obligations?

  • How do you measure your cloud usage to identify over-licensing? Do you have a flexibility to scale-down your contract?

  • What aspects you need to take into consideration when preparing business case to compare your on-premise infrastructure with a cloud solution?

BUSINESS CASE STUDY

Three-year term ServiceNow contract in amount of € 130k per year was going to expire in 6 months. No renewal terms were agreed and customer was under-licensed as 30% more users were accessing the system. The expectation was that annual costs will grow by 30% for unlicensed users + additional 15% as standard increase due to inflation and new features, ending up with € 195k per year.

Contract review revealed several high-severity risks like missing divestiture clause. However, customer was in process of company spin-off. In addition, there were no territory use rights agreed, while customer was operating worldwide.

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Through the Cloud Smart managed services, we achieved following:

  • We reviewed users, introduced new user type (from fulfiller user to business stakeholder user) and removed users accessing the system sporadically.

  • We headed for early renewal to use end of vendor’s quarter and eliminate ServiceNow’s leverage given by non-compliance in the end of the contract.

  • Negotiated possibility to purchase additional licenses retrospectively on quarterly basis to increase flexibility.

  • Added a clause for license transfer to divested entity and split of contract costs.

  • Final contract price was decreased to € 110k per year.

WHAT IS NEEDED FROM YOU?

  • Introduction discussion with the contract’s stakeholders.

  • Prioritize revealed risks from customer’s perspective.

  • Collect usage or provide access to cloud’s dashboard.

  • Discussion on proposed solutions and strategies.

  • Introduction meeting with the vendor. (optional)

  • Bilateral NDA

  • Copy of the cloud contract including all related contracts (e.g. Master agreement)

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