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Research suggests cloud vendors must create more flexible contract terms

As the cloud becomes more widely utilized across the private sector, vendors are encountering a unique predicament that they must address or risk being left behind by competitors. According to a study by the University of London, hosting companies need to create more flexible and customizable contract terms, rather than a one-size-fits-all model, if they want to stay relevant.

"To remain competitive, providers may have to be more aware of user concerns, more flexible in negotiations and more willing to demonstrate the security and robustness of their services," cloud legal project lead academic Christopher Millard said.

This is largely because traditional contract terms were often in favor of the service provider and were non-compliant with regulatory laws. Also, as more small and medium-sized businesses adopt the cloud, decision-makers will need new contracts that meet their unique demands, the study said.

According to a recent report by Spiceworks, as SMB IT budgets rise, cloud computing will be one of the most common investments to give small firms a competitive advantage.

As the cloud grows in adoption, service providers need to recognize the need for unique contract terms that will enable companies of all sizes to fully leverage the technology.

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