Information Technology Reference
In-Depth Information
2002), he will not be liable for that. From a different perspective, if, for instance, the
Grid/Cloud provider expressly states that certain system or software requirements
are necessary in order to receive the service, and the customer does not update his
systems or does not comply with such requirements, the provider will not be liable
if the service cannot be delivered.
Having said that, the legal limitations of liability are not enough to 'protect' the
Grid/Cloud providers and let them maximise the profits with little or no risks of
being sued and being found liable to pay damages, especially in innovative business
sectors in which it is not always clear to assess whether the contractual obligations
have been respected and, if not, who is liable for that. For these reasons, non-nego-
tiated (i.e. imposed) agreements that state that the provider does not warrant (i.e.
guarantees) that the service will function as described in the SLA and that it will
be uninterrupted or error free are common. In other words, the technology supplier
will not be responsible for any service interruptions, including, but not limited to,
the so-called acts of God.
In practice this means that the customer will take all the risks and that he is
required to simply trust the Grid or Cloud provider, without receiving any legal
guarantee that the service will be supplied as expected and promised in the SLA.
Legally speaking this is a case of obligation with no sanction, and the supplier is in
the position to decide if and how to deliver the service. According to the law and
economics literature, this kind of agreement is not efficient, provided that “coopera-
tion is efficient when the promisor invests in performing at the efficient level and the
promisee relies at the efficient level” (Cooter and Ulen 2004), but it is undoubtedly
very convenient for the provider.
From this consideration we can infer that an SLA (or other contract) negoti-
ated by a Grid/Cloud provider and a customer should balance the risks between the
parties and should 'motivate' both of them to respect their obligations (provided
that the main and more or less only obligation of the customer is to pay the fees for
the service). This implies that, for instance, the agreement should prevent the Grid/
Cloud provider from reducing the quality of the services delivered to the customer
in order to satisfy the requests of other, more demanding and/or more important,
clients and, if he decides to do so, he should at least pay the damages suffered by
the former customer or to compensate him in a different way.
Such a different way is usually the service credit system. It is common practice
that the SLA states that, in case the availability level or, in general, the QoS has not
been reached during a certain period of time, e.g. on a monthly or yearly basis, the
customer will be entitled to receive a 'credit' equal, for instance, to 10 % of the bill
for that period. To make an example, the SLA between
SuperICTResources
and
SaaSforyou
states that the availability of the service will be 99,95 % on a monthly
basis and that, if such level has not been reached, the customer will be entitled to
receive a service credit of 10 %. In a certain month
SuperICTResources
is able to
provide the service only for 85 % of the time, and this means that in the next month
SaaSforyou
will pay his bill with a 'discount' of 10 %.
First of all, service credits will usually not be applicable in the case of an act of
God (e.g. the availability level could not be reached due to failures at the level of
