Cyber Legality

Product Vendor or Subcontractor: What Kind of Relationship Do You Have with Your Cloud Vendor?

It is a buyer’s market out there, with excellent offerings from both major and specialty prices at competitive pricing. Why would an individual or corporation want to invest significant sums in acquisition and maintenance of a software package, when for a small (or even no!) monthly fee it is possible to have the latest version of industry-leading tools available on your desktops, mobile devices, and even as a web-delivered application accessible from anywhere?

Writing for Entrepreneur in 2014, Sarah Austin described a more nuanced issue when it comes to picking up an office automation or back office solution.

“Not so long ago when a startup or enterprise was determining the cost of an employee, one of the single largest expenses was the licenses for the back-office software that business runs on.

In a world of the $300 laptop, paying $219 for a copy of Microsoft Office Home & Business is hard to swallow. As a result, companies are turning to the cloud, using Google for Business and Microsoft Office Online instead.

It is easy to think that the two big fish in the market are equal competitors, but in truth the devil is in the details on these two offerings, and picking wrong can be very painful. Most people pick their back office based on the user experience. I’ll explain why that is wrong a bit later, but first, a quick rundown on the two.”

The article goes on to compare the behavior of the two providers, contrasting key differences in the approach taken, finally concluding that:

“That makes the decision easy for me. If you are doing anything concerning medicine, the law, children, financials or where someone might think you are doing something illegal, (such as starting a disruptive business, as in the “Uber of insert an industry”), you should likely go with Microsoft.

If you are doing something that has none of those risks, and everyone collaborates on text documents, such as an engineering startup or a graphic design firm, Google for Business is likely a better choice. That is until you start to do business with someone from the above categories of business, then you will need to do a migration.”

What does this mean in 2018? While the big players in the space have converged, and are likely to keep converging, the lesson to take away is that the potential impact of a cloud service on your business may be far-reaching than just the price point and the more obvious security questions.

We need to remember that choosing a cloud service does not just mean choosing a product or a service but is also about establishing a relationship with the supplier. You will have outsourced a piece of your application landscape to these suppliers in much the same way as if they were a subcontractor providing services with their staff and service on site.

Questions to Ask:

  • What are the vendors, or even other customers, allowed to see or do with your data, and when?
  • How is this activity controlled?
  • Does it present any compliance or intellectual property issues for you?
  • How are you tracking changes to supplier terms, the potential impact on your business, and your contingency plans if new terms are no longer acceptable to you?

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