Data Center Outsourcing: Contracting For Contingencies And Complexities

In Brief

What You Need to Know:

• Data center outsourcing involves an expanded set of dependencies compared with IT or business process outsourcing; conventional outsourcing typically addresses operational risks, while data center outsourcing involves operational, infrastructure, regulatory, and developmental risks, among others. As a result, contracts should account for important contingencies such as unfinished facilities, future power availability, pending permits, construction schedules, specialized equipment, and third-party infrastructure.
• Customers and providers should clearly define the contracted outcome, the dependencies for that outcome, and the party bearing the risk if an assumption proves to be incorrect. Agreements should preserve accountability while giving each party sufficient clarity to manage and price the risks it assumes.