5 Pitfalls to Avoid When Buying Cloud Software

The cloud is a dramatic change. It may make your employees afraid of losing their jobs. As always, it is best to align incentives with desired outcomes.

The cloud is secure. The vast majority of data breaches happen in software and infrastructure that is managed by internal IT staffs that are stretched thin. A cloud vendor with high-quality IT service will generally be more secure since cloud security is very specialised work and focus is required. Ask your CIO/CTO to read this report published by Verizon that found that only 10 vulnerabilities account for almost 97 percent of all security exploited in 2014.

Pick a cloud partner that is a few orders of magnitude smaller than the size your company as there is an advantage to be a big fish in a small pond of your vendor. You will garner more attention and have the upper hand in the relationship when you are among the largest customers of your vendor.

This is the fallacy of a sunk cost. Only the incremental revenues and expenses should be considered in any financial analysis.

In the long run, it is a wise investment of time to personally sign off on large cloud vendor agreements so that you understand the risks and benefits of the cloud. Since the cloud is still relatively new, do not delegate important business terms and conditions to your legal team without your review.