Empty Promises and Tough Luck: Yankee Group Exposes the Cloud's Fine Print

Study of 41 cloud vendors finds weak service level guarantees, poor transparency and limited financial redress are the norm.

Boston, MA Apr 21, 2010 - Caveat emptor: These watchwords must guide enterprises considering cloud computing services. According to the Yankee Group report "Cloud 99.99: The Small Print Exposed," today's cloud contracts are rife with disclaimers, misleading uptime guarantees, and questionable privacy policies and compliance claims.

The report examines terms of service (TOS), service-level agreements (SLAs) and privacy policies for 46 software-, infrastructure- and platform-as-a-service (SaaS/IaaS/PaaS) offerings from 41 vendors, including industry heavyweights like Amazon, Google, Microsoft, Salesforce.com and Rackspace.

Overall, the results aren't pretty. Of the 46 services studied, none offers a cash payout as standard compensation for breaking contractual promises. Typically, customers must make do with service credits or contract termination.

"Cloud service providers better clean up their act fast because major investment decisions hang in the balance," says Camille Mendler, VP and senior research fellow at Yankee Group and author of the report. "Enterprises need transparency, professionalism and certainty to invest in cloud services--few providers are stepping up."

The report, which also offers key risk mitigation tactics, urges enterprises to watch for:

  • Slippery SLAs: Whatever the number of 9s offered, "uptime" definitions vary, and service demarcation points for uptime are rarely end to end. Vendors also tend to play fast and loose with scheduled maintenance windows.
  • Cagey compliance: SAS-70-certification is not a blanket guarantee of safety or survivability. Enterprises should also seek ISO 27000 credentials, and check vendor adequacy against international data protection regulations.
  • Self-serving metrics: Beware vendors acting as both judge and jury in determining service performance. The use of third-party performance monitoring tools must become table stakes for credibility.


About Yankee Group
Yankee Group is the preeminent research and advisory firm equipping enterprises to profit in a mobile world. The core of our content is proprietary research and analytics on the attitudes, behaviors and usage patterns of mobile users. Based on this research, we provide a range of actionable data, insights and advices to marketing, strategy and product executives driving the mobility revolution in leading companies worldwide.