Q&A with Bob Parisi

What risks may companies not be thinking about when they move into the cloud?

Often they’re not necessarily taking into consideration when things go very, very wrong in terms of basics—the cloud provider going out of business, the cloud provider having an event, or just something as simple as the cloud provider and its customer having a dispute over fees. These are very non-technical types of things. People tend to focus on the front end—how sophisticated is this platform that we’re going to? How much are we saving by moving this piece of software to the cloud or this storage of our data to the cloud? The thing that people often don’t consider as deeply as they do the front-end aspect of moving into the cloud is what happens when you want to extricate yourself from the cloud or something goes wrong and the cloud’s not working.

What about the technical aspects, like data security?

That’s the low-hanging fruit. Security and technological capability, being able to get it done technologically—that’s the first thing that people think about. Then they think about indemnification agreements and what the contracts look like. What we found is that a substantial number of cloud providers are not assuming any liability in their contracts—something customers have to factor into their decision making when choosing a cloud provider.

What should cloud customers be looking at?

It goes into the normal exercise of managing risk. You’re managing the risk of outsourcing a portion of your company’s operations, in this case technology. It’s a very exciting area of technology, and there are a lot of great companies that are doing tremendous things. It’s also a bit of the Wild West. It’s a place where you want to be careful. You want to make sure that the cloud provider meets the same level of financial stability and trustworthiness that you’re requiring in your other vendor relationships. The mere fact that it’s cloud and sounds cool doesn’t mean you should walk away from your normal due diligence.