As the British ‘Brexit’ negotiating team is just about to find out as it unravels the country’s participation in the European Union, there’s a good deal of complexity when it comes to Europe. While the EU project has focused on a coordinated approach to many issues, the 28 different legal administrations can cause difficulties
The rise of cloud computing has had an invigorating effect on the European economy. On the one hand, cloud is the perfect metaphor for a single market, traversing boundaries and providing a genuine pan-European alternative. On the other hand, cloud providers and customers still have to deal with a legal framework based on differing legal systems.
It was against this background that European Commissioner Neelie Kroes first proposed a standard approach to cloud across Europe, setting out a common service level agreement for cloud providers to offer their customers. There have been some protracted discussions over the past couple of years but now there’s finally a working model.
Slalom, which was funded by the European Commission and launched in January 2015, has been designed as a way to produce consistent, legally-worded, and ready-to-use cloud contract templates. But it’s not just legalese: there’s a technical element too.
Under the Slalom scheme, a company implements a workflow in which the main contractual relationship is managed by the Master Service Agreement (MSA). This, in turn, defines a number of technical and legal aspects of any SLA that is being used.
Factors included in the SLA will include:
The development of Slalom has been a major undertaking as there was nothing like it available before. According to David Bicket of the Cloud Industry Forum, who has been working on the specification, while the cloud industry deemed such a project worthwhile, the cost of developing it would have been prohibitive to businesses. It was only when the European Commission decided to fund the initiative that it could get off the ground.
The thinking behind Slalom was that it would be an initiative for the benefit of both large and small businesses, of both cloud providers and customers, for organisations operating across all European countries.
That’s not to say that every country was covered in detail. “It was not possible to look at all 28 member states,” says Gian Marco Rinaldi, a lawyer with Bird & Bird, the legal firm behind the Slalom initiative. “But we looked at all the laws in Germany, France, the UK, Italy and Greece to give us an idea of the issues.”
The UK was particularly interesting to the legal team, says Rinaldi, but throughout Europe, there were many differences although attempts have been made to level the playing field.
“We don’t have a general law on contract – on things like liability or subcontracting for example. So our effort was to find a common contractual standard that could be applied across Europe.”
Levelling the playing field
However, despite this search for a common denominator, Rinaldi says that it would be hard to have a universal template that could be applied in every country. “Our suggestion is to have it reviewed by a local legal expert to check that it’s line with national legislation.”
According to Bicket, there’s been an interesting divergence when it comes to small companies and large corporates in attitudes to the Slalom templates.
“For large organisations, contracts are rather large for historical reasons. They’ve tended to grow as one clause gets added, then another. Slalom was not something that could be dropped in quickly.” On the other hand, he says, the technical guidelines were something that could be used.
Small businesses have had the opposite problem: the templates have been useful for them as they don’t have big legal teams but they haven’t found it so easy to implement the technical guidelines as they don’t have large IT departments and there’s a skill shortage there.
While the Slalom templates offer a way forward in negotiations, there are still limitations on smaller businesses. One of the issues with existing cloud contracts is that there’s a disproportionate power wielded by large companies. This has led to SLAs being too favourable to the cloud suppliers, with little room for leeway.
Bicket says that large customers do have some power, pointing that, in one case that he’d come across, a large government organisation with a huge budget was certainly not shoved aside. “When they went to get tenders for cloud contracts, they wanted service levels and metrics as part of the tender.”
The Slalom project is not the only one that’s looking at cloud contracts. ISO has also been taking steps – although when the Slalom project started ISO hadn’t started its foray into the area – and has developed a family of standards, of which 19086/1 for an SLA framework is the first.
The two can coexist, as Bicket points out. “Slalom had its own model but it wasn’t up to the metrics of ISO,” he says, but, he adds, the Slalom team has been very much involved with the development of 19086/1. The two models are, however, independent of each other. The ISO standard is still in development while Slalom is available now and is already being looked at by various organisations.
These are early days: the Slalom guidelines were only released in May – just prior to the European Commission funding finishing, but the initial signs are that the project is filling a major gap in the European cloud market and should provide a much needed structure for future cloud contracts.
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