Thursday, 25 July 2013

If Your Data Provision Changes, Don’t Be Left High and Dry…

At Merlin we never hide from uncomfortable subjects, and this topic is one which we urge you to consider when switching or choosing business services providers.

There are lots of benefits to moving your IT and telecoms to a hosted, co-location datacentre. 

There is predictability – a long-term agreement can be established with the majority of service providers that covers everything needed -datacentre space, connectivity and facility services for co-location –but what if that predictability is cruelly shattered?

There are a range of things that can go wrong with a datacentre or a co-location service provider. 

Datacentre contract clauses – revised fees and charges.

Many providers will have clauses that allow them to review your charges when they themselves are faced with a substantive change. Obvious ones here are areas such as if the government changes VAT rates, the tax will be charged accordingly. 

Less apparent ones could be changes in energy pricing – if a provider has not locked in a long-term energy deal with their energy supplier, it will have left itself open to spot pricing – and with energy prices being volatile, it may have to “renegotiate” its pricing with you.

Merger or acquisition

Another possible surprise could be that your provider is acquired. This may make no difference; it could even be good news, however, it could be also be that the acquiring company is one that you have made an active decision to avoid, for whatever reason.

Failure of the service provider

However, the biggest issue that can hit any organisation using an outside IT service provider is the failure of the outside company. Yesterday, everything seemed OK; today, there just isn’t any service and no-one is returning calls. This is the worst possible news – so how can you attempt to rescue yourself, along with improving other issues?

Everything is down to the contract

In essence, the basics come down to the legal agreement. It’s reported that many contracts tend to put all the risk on the customer, with very little being on the provider, which clearly isn’t acceptable.

You need to be confident that you’re working with a provider who’s willing to enter into sensible negotiations and come up with a bespoke contract that meets both parties’ needs.

As a starting point, it is necessary to see how major changes to the cost base of the provider will be dealt with. The contract should also allow you as the customer to review your position and call a halt to the agreement with sufficient notice in the event of a material change to the status of the provider, such as through acquisition. 

The contract should also be the place where the failure of the datacentre service provider is covered. This is not an area that many providers are keen to discuss, as just talking about it is recognition that their organisation is just as mortal as anyone else’s.

However, on failure, all the equipment that was owned by the provider becomes the property of the administrator, whose job is not particularly to run a business, but to optimise the return to the creditors. Unless this involves being able to find a buyer for the business as a going concern, the administrator is unlikely to have any interest in you as a customer whatsoever.

For a co-location contract, make sure that it is written into the contract that you can enter and retrieve your equipment at an agreed end of the contract or on the failure of the company.

For hosted or I/P/SaaS contracts, make sure that the contract covers that the data is yours, and that the company or its administrators have to allow you access to the data within an agreed timescale. If possible, get a provider to agree that you can supply a network attached storage (NAS) device where your data can be backed up on a regular basis, so that if the provider does go bust, you can turn up in a van and take ownership of your device with all the data on it.

In essence, the contract is king. Don’t just sign anything because it seems to be the way to do things. Negotiate from a position of strength and ensure that you go through all the provider’s clauses with a fine toothcomb. Otherwise, you are just gambling with your organisation’s future.

This information was inspired by Clive Longbottom at Quocirca Ltd, contributor to Computer Weekly.

You can ask us any questions about our data storage and services, call us on 0800 877 8810.

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