Evaluating a Cloud Provider’s Financial Integrity

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  • Evaluating a Cloud Provider’s Financial Integrity

To minimize downtime risk, cloud providers offer Service Level Agreements (SLAs) to their customers.  The SLA guarantees redundancy so customers can trust their data will always be available.  But how can a customer trust its cloud provider won’t close its doors?

Unfortunately, bankruptcies happen.  And an SLA won’t protect a customer when a cloud provider goes out of business.

So, what’s the best way to protect against a potential provider shut down?  Datacenterknowledge.com recently published an excellent article titled “Beyond the SLA: Choosing a Financially Sound Cloud Provider.”  The article advises customers to:

  • Develop an exit strategy – Companies need to think ahead about what would happen if they had to quickly change cloud providers.  Remote backups and hybrid clouds represent a couple of solutions.
  • Select a cloud provider with solid financials – Customers need to trust their cloud provider will be around for the long haul.  Financial stability trumps all else in the selection process. Therefore, it’s critical to evaluate such things as cash flow, investors, spending forecasts, profitability, and more.
  • Check the source of the provider’s funding – Is the cloud provider raising money through equity, debt or both?  How much liability has the provider taken on?
  • Build relationships – With all providers, relationships matter.  It’s important to be able to visit the data centers and talk to the important players whenever a customer desires.

Analyzing a cloud provider’s financial stability is the most important step in the selection process.  With a high degree of trust in the provider’s financial soundness, a customer can then move on to negotiating the SLA.

To read the full article, visit Datacenterknowledge.com.