Gartner Research

IT Procurement Best Practice: Six Ways to Avoid Escalating Costs During the Life of a Cloud Contract

Published: 28 February 2011

ID: G00210832

Analyst(s): Frank Ridder , Alexa Bona

Summary

The allure of many "cloud" services is the promise of low cost. However, many hidden costs arise after the deal is signed. Procurement and sourcing professionals must negotiate the protection required for sustainable deals with predictable costs or walk away from deals.

Table Of Contents
  • Overview

Analysis

  • 1. The Cloudiness of the Scope: Documenting What Is Included in the Fee to Prevent Unexpected Invoices Midterm
  • 2. The Mirage of Use-Based Pricing if Usage Goes Down
  • 3. The Illusion of Price Protection or Improved Pricing for Incremental Units During the Initial Term
  • 4. The Illusion of Price Protection on Renewal: The Risky Combination of Subscription Pricing, Auto Renewals and No Price Caps
  • 5. Definition of What is Included in the Pricing Metric and Fees for Non-Corporate Use
  • 6. Data Ownership and the Ability to Extract Data Midterm or on Exit With No Fee

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