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Gartner: IT Procurement Best Practices

May 23, 2011

IT procurement or sourcing managers are constantly challenged with finding new sourcing options that reduce costs to tolerable risks. Gartner recommends examining nine contractual terms to reduce risk in cloud contracts. The cloud delivery model is gaining popularity, but it includes some risks that are often unclear and/or overlooked when assessing the appropriateness of the sourcing model.

“Cloud solutions often appear to have lower initial and switching costs than traditional solutions, but include hidden costs and risks, and require unique terms for contract protection, compared to traditional arrangements,” said Alexa Bona, research vice president at Gartner. “Many cloud providers appear reluctant to negotiate contracts, as the premise of their core model is a highly leveraged approach. The starting point contractually often favors the vendor, resulting in a potential misalignment with user requirements.”

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