In late 2014 I wrote a briefing for my firm's clients pointing out that, over the past 18 months, we have seen more negotiation of cloud contracts and that one of the keys to success is to know what can be negotiated and how much. I argued that the cloud sector doesn't help itself with complex, multi-layered agreements spanning lots of separate documents.
Psychic, or what? Almost that same day, IBM announced the arrival of a new, shortened and simplified Cloud Services Agreement that doesn't even manage to fill two pages. IBM reckons that, by dramatically simplifying and accelerating how clients contract for cloud services, it's making it easier and faster for companies to reap the benefits of cloud.
Well, I'm not so sure. It's like saying that Usain Bolt is a better runner than Mo Farah – it reality, it depends how far you need to run and how fast you want to get there. As anyone who has negotiated contracts will know, reasonable length doesn't always equate to reasonable terms.
The main thing that customers want from a cloud survive provider is some degree of commitment – even if they don't necessarily expect the same level of certainty as from a non-cloud arms' length outsource services provider. Although the first section of the new IBM Agreement is entitled Service Performance and Commitments, it contains little in the way of actual commitments. For example, the cloud services are merely "designed" to be available 24/7; and, while IBM agrees to provide notice of scheduled maintenance, there are no limits on the timing or duration of such maintenance.
Despite the agreement's apparent brevity, customers must still also review the Service Description – in a separate document – to determine what, if any, licence rights, data security obligations, service levels and renewal options will apply. So IBM has not yet managed to conquer one of the common bugbears of cloud customers – multiple document fatigue (although at least IBM's documents are more internally consistent than many other providers').
To be fair, the new agreement does provide terms that a customer will want to see – such as an indemnity against third-party patent and copyright claims – but the value of these terms is often limited. Even in the shortest contract, the devil is still in the details.
I'll admit that singling out IBM feels a bit churlish – at least it's tried to improve the cloud contracting process. IBM has used plain English and responded to criticism of service providers who often don't keep agreements as "short and simple" as possible (which even a lawyer will agree is unquestionably an important goal that will help to reduce costs for both parties).
It would be nice to think that, as more negotiation of cloud contracts becomes possible, agreement templates become more straightforward and less one-sided. At the same time, anyone reviewing such an agreement should bear in mind that it may have been "shortened and simplified" by the omission of key legal protections.
Ultimately, an informed customer wants an agreement that is short, simple and sweet.