End-of-Contract: Don’t Let the Cloud Opportunity Drift Away

Katherine Rudd Blog

Katharine Rudd, Managing Director –

The end of an outsourcing contract term requires a careful review of existing operations, coupled with an assessment of alternative technology, provider and delivery model options. In today’s dynamic marketplace, you simply can’t assume that what you have in place today will be adequate moving forward.

Consider cloud, where offerings are evolving at an especially frenetic pace, and where end-of-contract represents an ideal time to explore new opportunities. In many cases, service providers are too busy managing to the SLA and operational requirements of your agreements to keep pace with innovation in public and private cloud.

New cloud offerings can deliver major benefits to infrastructure management in terms of cost savings, labor requirements and agility. As competition heats up, most if not all of the major U.S. and India-based outsourcing providers have developed a healthy menu of hybrid, private and public cloud offerings. Brokerage services have matured, enabling clients to use third-party outsourcing providers to procure on-demand public cloud offerings and oversee and manage commercial, operational and technical requirements. Clients benefit by leveraging purchasing power, avoiding lock-in with one provider and offloading day-to-day management responsibility of multiple providers.

Hybrid cloud is generating a lot of industry buzz right now that can translate into big dividends in how you contract with your service provider. Adequately leveraging your existing infrastructure investments, while also taking advantage of agile PaaS and IaaS for growth or specific applications, can be a great way to deliver on a cloud roadmap in a less disruptive way.

These opportunities needn’t be restricted to the end of a contract period. Mid-term can be a great time to do a health check on a relationship to ensure that providers are driving innovation and not sitting on legacy infrastructure associated with high management costs.  Many contracts contain innovation or tech refresh clauses that can provide a window of opportunity to assess possibilities. However, depending on the structure of the agreement, the introduction of innovation may reduce resource requirements and negatively impact provider revenues. So sitting around and waiting for a provider to “offer” you innovation may leave you doing just that – waiting.

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