by Alistair Maughan

Licences proving to be cloud busters

Nov 20, 20123 mins
Cloud ComputingIT LeadershipIT Strategy

Cloudofferings have been around for long enough now that advising on legal issues follows a well-worn path. You talk about privacy and data security; you think about the effect of uncertainty around the location and storage of data; you consider the extent to which the terms offered by the provider are appropriate and whether any negotiation is possible.

From a legal perspective, successful deployment of cloud services comes down to knowing the art of the possible and identifying (and resolving) potential barriers in advance. The problems tend to come from having to wrap an inherently flexible delivery mechanism around some hard-edged legal rules that weren’t designed to deal with remote servicing.

But sometimes the relative immaturity of cloud reveals itself. Maybe it’s just that providers’ legal and contract support teams aren’t as aligned as they could be with the technical offerings. I have seen that mis-alignment recently in a project designed to deploy cloud across a shared services environment.

There are many reasons why cloud could legitimately be harder to roll out across a shared services environment than in a single-client environment. These come down to individual differences and divisions between the organisations sharing services. But, frustratingly, what shouldn’t be an issue is the cloud provider’s licensing model. Some cloud providers seem to require a separate licence for each legal entity receiving the services or can’t seem efficiently to correlate between its cloud-based licence terms and a multi-client shared service environment. This strikes me as peculiar and counter-intuitive.

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A licence is no more than a legal fiction created for the purpose of allowing revenue generation without surrendering legal ownership of the licensed asset. A licence can be made to do virtually anything because all it takes is an appropriately worded contract clause that creates the necessary flexibility.

Many organisations in a non-cloud world contract centrally for their software applications and then deploy them across multiple affiliates and associated organisations without requiring separate direct licences to each end user: if you’re really lacking creativity, that’s what a sub-licence is for!

To say that licensing in a cloud world is effectively a blockage to the deployment of shared services infrastructure via cloud seems to me to be a failure to bring the same creativity and flair to a licensing question as those involved in technical deployment have brought to the delivery of the service itself.

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