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Negotiating Multi Cloud Contracts with Leverage

negotiating multi cloud contracts with leverage

For most organizations it is not a matter of if but when all organizational data will be in the cloud. Significant amounts of organizational data is already birthed in the cloud today, while there are other datasets born on-premises. Even for on-premises data, organizations are increasingly leveraging the cloud for backup, disaster recovery and analytics.

Cloud Offerings

While many of the cloud offerings tend to be similar for IaaS offerings, there are significant differences when it comes to PaaS offerings. Although customers would like to leverage best of breed across cloud vendors, they tend to double down on offerings from a single cloud provider. In many multi-divisional organizations, there are times when each division tends to make their own independent decision with the centralized office of the CIO offering a couple offerings to choose from. 

Cloud & Procurement 

Larger organizations with well honed procurement groups have ELAs with cloud providers giving them preferential pricing. Some of the pricing in ELAs seems too good to be true. What’s the catch? Moving data to the cloud is typically a one way street. 

Costs 

Have you tried getting data out of the cloud? Exit barriers tend to be very high, right from high egress costs, to lack of high speed infrastructure, to at times no ability to rehydrate the data and application structure to run on another cloud.

Risks

It is not common, but also not unheard of, that cloud data becomes unavailable. There have been a few large disruptions in the recent past  including major outages at Azure and AWS. 

Lock-In

The biggest issue of having all your data in one cloud is vendor lock-in. Not an issue for the cloud provider of course. It seemingly gives you some level of simplicity but at a cost which includes vendor lock-in which comes back to bite you at contract renegotiations.

Mitigation Plan

While there is no foolproof method, there are steps you can take to have leverage at the point of contract renewals and negotiations, including implementing a multi-cloud DR strategy with one-click orchestration for all your workloads. Think 1000s of VMs, databases and file servers failing over to another cloud with a single click. Guess who has the upper hand when your contract comes up for renewal… you!

Learn more about one-click DR orchestration