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What happens if your Cloud service provider goes into administration?

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23rd Jul 2013
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Like so many organisations, Cloud service providers are not immune to the perils of the economic downturn.
But when a provider of Cloud services goes into administration what happens to the companies that have put faith, money and resources in finding the right provider and now risk losing services, resources and data as a result of their fall?
For many organisations, the issue is: when their customer data is in the cloud; how do they retain control and ownership of that data in the scenario when their service provider goes under – and how easy is it to port to another service provider. Equally important: what mechanisms does the existing provider have in place to protect customers if the worst happens?
Typically, when organisations buy on-premise software, it is written into the contract that in the event that the software vendor goes out of business the customer gets control of the code. In other words, the ownership of the software and the responsibility for maintaining it effectively passes to the end user business. As a result, that business does not have to worry about the nightmare scenario of the lights simply going out on its operation if its software provider goes bust.  
In contrast, this would be a very real concern if the vendor’s software is running on its customer’s hardware and the user organisation is just paying a maintenance fee. With no ownership rights to that software, the user business could be left without any viable options when the vendor organisation goes bust.    
So how can the industry effectively address these real and legitimate concerns? Today, there is an irrevocable tide moving towards the cloud. This cannot and should not be wound back. But service providers and customers do need to ensure that they structure agreements and subscriptions in a way that insulates the end customer from this sort of scenario – particularly with something as important and customer-facing as a contact centre. Businesses simply cannot afford to lose the ‘front face of their organisation’ even if it is only for a matter of days.  
Taking action
To mitigate this threat, end-user organisations need to look closely into what they are signing up to when they make an agreement with the contact centre provider. Companies need to choose their supplier very carefully. In particular, they need to be wary about providers making extravagant claims about what they can achieve and yet offering knockdown prices. 
As Karine Palacios, head of Cloud contact next generation, BT Global Services, says: “Businesses should be suspicious about risk-taking new entrants to the Cloud market offering cut-price deals.  They need to be clear exactly who they are doing business with and what they are going to get for their money.
“Buying from the cheapest ‘new kid on the block’ is almost always a bad move,” she says. “There is no substitute for experience in this market. The Cloud contact centre market is now over a decade old and it takes some time to understand how to operate high-quality business-critical multi-tenant Cloud applications.”
Some providers are also much better than others in offering full accountability.  Unfortunately, some have not thought their approach in detail and some even back off this data to other organisations without providing full transparency to the customer. 
Businesses can look to protect their data by ensuring that they have access to an offline backup copy of that data at regular intervals, ideally every 24 hours. They need to know whether their provider is able to deliver this for them.  
One positive scenario would be an open approach where the customer organisation controls its own data and at the same time a counter party is involved in the process – typically another independent service provider which also has another copy of the software running. 
In this scenario, the customer could rapidly reload the data back into the service provider’s system and be quickly back up and running once again.  In today’s advanced contact centre environment where resilient IT systems and approaches like mirroring and co-location are readily achievable, this kind of situation is a realistic possibility.    
So there are clearly strategies here that Cloud service providers and their customers can adopt to mitigate the risk of the lights suddenly going out in a Cloud contact centre. 
Contact centre solutions providers, for example, can also make a significant contribution to ease the process and protect their customers by thinking very carefully about who they are providing their software to, by ensuring that they work with the most reliable and robust organisations and by doing due diligence. 
They can further help by asking for a significant investment upfront from their partners to help ensure not only that their own product is successfully taken out to market but that its customers are fully protected. Ultimately, it is a question of trust: the solutions provider has obligations to the Cloud service provider and vice versa and both have obligations to the end customer to provide robust, resilient and secure Cloud services.  
Pippa Rhys is senior marketing manager at Enghouse Interactive.
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