Business Owner Tips for Cloud and Hosting Contracts

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CIS has recently been helping several customers that went all in on the Cloud - not with CIS.  They took their phones, ERP, data storage, Outlook, to the Cloud.   Everything!  With these companies having numerous locations across the USA, moving to the cloud was a business critical decision that has impacted the day-to-day operations for up to two years.

Gain From Other Business Owners' Cloud and Hosting Pain

Unfortunately this list of issues was the reality for a few businesses that did not work with CIS or know what to look for in their contracts.

  • Lost printers for every user, everyday.  Can you imagine the chaos of having to re-install printers every morning?  The whole point of cloud / hosting is so you do NOT have to deal with IT issues.   This boils down to poor network design by the cloud provider.
  • Email outages for several days.  This is a no brainer.  No business can function without email anymore… we were emailing the companies employees personal accounts for information and to send quotes, etc.
  • No verification of backups for data recovery.   Regardless of where your data is stored, you should always know if you have a daily backup if not hourly!  In addition you must know, that the data is safe and accessible.   Businesses cannot wait days to get their systems back online and running.   Your data and application should be back up within an hour or two at the most.
  • No call transferring between locations and dropped calls.  This is an issue that I am not as familiar with since our CTO Richard Ayars handles all the phone business here at CIS.  My understanding is that the phone system was not set up correctly; however Richard and his team were able to work with the phone vendor and ISP to rectify the issue.
  • Overcharges on monthly invoices from the vendors – paying for services not in use.  Be sure you review your invoices or approve them prior to paying.  I am shocked by companies just assuming that their billing is correct…
  • ERP and data storage not on a PRIVATE virtual server (this can be an issue if you want to change providers).  Companies must really evaluate the difference and needs for a shared server environment or private.   A shared server means that your data is on a server with other instances or installations of your application.  Having your own or private virtual server means that if you decide you do not like your cloud or hosting partner and you want to move back in house or to another provider the move is easier.  You get your virtual server with all your installations and data and install it elsewhere.  If you are on a shared server then you will have to reinstall the software (which will cost money) and then move the database.  Shared has a cheaper monthly payment than a virtual installation.  Get with your trusted IT advisor to decide which option is best for your business.
  • ERP software version was not supported by the publisher (i.e. Microsoft or Sage).  If you are going to utilize SaaS or software as a service and your upgrades are part of your monthly payment / contract then shouldn’t you be running supported software?

How to Avoid the Pain with a Solid Contract

The good news is that these issues can be avoided with the right contract and you taking responsibility. After digging into the details of these customers' contracts it was easy to see how the cloud vendor could get away with such poor service. The contracts were vague and did not specify a service level. Here is what you should look for in a contract to ensure your vendor knows what they are doing and if you are having problems with the service, you can fire them if they do not meet their obligations.

  • What is the ERP cloud vendors’ responsibility for supporting printer setup and new users?  Check references and ask if this has been an issue and how it was resolved.   Make sure your contract outlines the vendor's responsibility and service level agreement (SLA).
  • Backup and data recovery should be clearly defined.   Backups should occur every night if not incrementally every hour.   Do you have access to the backup if needed?  Where is the backup stored and is it sent to another off site location?  This might cost you more, but if your ERP system and data are critical to your business surviving, then pay the additional cost for offsite backup.   IF your system does somehow become corrupted or the cloud provider has a total power loss, how long will it be before your system is back and accessible to your end users?  The timing that you need will depend on your business requirements and again faster recovery may cost you more depending on your SLA requirements.
  • What is being backed up?  If you are using your vendors file storage, email or whatever, you should verify what is being backed up and specify your needs in your contract.
  • Ensure that regardless of your cloud choice; private virtual or shared server that you have a way to get your data up and running on a different server or provider with ease.   Make sure there is verbiage in your contract on the steps needed to get your data and software applications.

I am sure this is not a complete list of things to look for in a contract.  Please share your ideas and experiences with us below in the comments box or via email at

More Resources:

Business Should Not Rush to the Cloud

Webinar Recording: Business IT Services and Cloud Computing

Manufacturing in the Cloud

CIS is a Managed IT Service Provider and a Microsoft Dynamic GP Partner located in North Texas.


Nancy Phillippi is the sales and marketing manager at Custom Information Services (CIS).   CIS offers cloud and hosted options for business including Dynamics GP, Microsoft Office, Microsoft SQL, Data Storage, etc.


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