IT outsourcing and data backup contract

appvizer has taken on the task of dissecting the IT outsourcing contract- what a program!
Whether you're an IT service provider, a software reseller/installer, or a corporate customer, this article is for you!

Are you wondering how to draw up an outsourcing contract, and what it should contain? What are its advantages and disadvantages? What are its subtleties?
How can this type of contract be applied to IT data backup, and what are the current market benchmarks for SaaS solutions?
These are just some of the questions we'll be answering here.
Warning: by the end of this book, you'll know all there is to know about IT outsourcing!

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IT outsourcing: definition

Quite simply, it's the outsourcing of services.
IT outsourcing is the practice of delegating all or part of an information system (IS), its management, operation, optimization and/or security, by companies (of all sizes and in all sectors), to an external service provider (the outsourcer).

This includes the management of computers, data and software, via remote control and/or regular physical interventions (weekly or monthly as required).

Different types of IT outsourcing

We speak of global or partial outsourcing, to be defined between the customer and the service provider:

• IT infrastructure management;
• application outsourcing: management of software and software packages owned by the customer (ERP, CRM, etc.);
• application supply outsourcing: management of software and packages that the customer does not own (rental, subscription);
• global outsourcing: all of the above.

Outsourcing may involve :

• hardware installation,
• maintenance :
  • preventive (monitoring and security)
  • curative (correction of bugs and anomalies),
  • upgrade (improving existing equipment),
• troubleshooting,
• site hosting,
• technical support,
• data storage and backup,
• IT consulting,
• IT auditing.

IT assets

The hardware and software resources that make up an IT system include :

• tablets,
• smartphones
• servers,
• data backup solution,
• routers,
• internal network,
• printing equipment,
• telecom equipment,
• security equipment.

Advantages, disadvantages and risks of IT outsourcing

Advantages (for the customer)

• Concentration on core business, know-how,
• Lower costs than hiring an in-house IT specialist,
• Savings on indirect costs (electricity, telecom and IP),
• Genuine collaboration with expert IT service providers,
• Transformation, performance and process improvement,
• Flexibility in the face of major changes (innovations, regulations, etc.).

Disadvantages

IT outsourcing can pose problems in terms of copyright and intellectual property.
It is sometimes necessary to ask a software supplier, such as an accountant, for authorization to modify or install its software on another machine, before signing an outsourcing contract.
It is becoming increasingly common for service providers to offer their services subject to an upstream control and verification audit.

Risks

Some risks affect both the customer and the IT service provider. These include

• related to subcontracting: particularly if it does not meet the legal and security constraints required by a specific business sector (banking, medical, etc.);
• linked to the choice of service provider: don't hesitate to challenge the contract if the service provider proves to be incompetent (non-compliance with specifications) or no longer provides the agreed services;
• related to data location: hosting locations (main site, backup sites, back-up sites...) must meet standards (data protection is not as strict in the United States as in France, especially since the implementation of the RGPD) ;
• legal: the customer may be held liable if the service provider fails to comply with legislation;
• information dissemination: the consequences are always borne by the customer, but he or she may claim compensation from the service provider;
• related to shared hosting: if several services are hosted on a single server by a service provider, thus rationalizing its resources, this may result in :
  • loss of data availability,
  • loss of confidentiality: in the event of cross-fertilization of information,
  • loss of integrity (incompatibility in the event of software changes or attacks, making data unreadable).

Setting up outsourcing

Several phases:

1. Opportunity and feasibility study by the customer,
2. Decision-making and drafting of specifications,
3. Invitation to tender, or short listing of several outsourcers,
4. Receipt of proposals from service providers,
5. Choice of service provider,
6. Technical and legal audit,
7. Set up and sign outsourcing contract,
8. Partial or total transfer of responsibility between customer and service provider,
9. Contract upgrades if adjustments are necessary,
10. Operational phase,
11. End of contract, at the initiative of either party,
12. Termination of outsourcing services and reversibility.

Managed services specifications

The customer prepares a document for the service provider containing :

• presentation of the company (different sites, contacts dedicated to monitoring the service, etc.),
• presentation of the sector and its specific regulatory requirements,
• IT assets (network, servers, workstations, users, etc.),
• constraints (dates, schedule, budget),
• the services required (corrective, curative and evolutionary maintenance, the three services, back-up, etc.) and their scope,
• assistance required (support, training, etc.),
• planned upgrades,
• a one-page summary of all these elements.

The service provider can then make a proposal or respond to the invitation to tender accordingly.

IT outsourcing contract

Like all contracts, the IT outsourcing contract is complex.
It is a highly technical service contract containing both basic and specific clauses. It is drawn up by the service provider.
It is recommended that both parties seek the assistance of a competent lawyer for the drafting and conclusion of this type of contract, or in the event of a dispute during its execution.
The duration is always multi-year, and can extend to more than 10 years.

Focus on the IT outsourcing contract

Obligations of the parties

If the outsourcer undertakes to provide a service, the customer undertakes to provide all access to hardware, data and information essential to the smooth running of the service, and to check that there are no intellectual property issues with certain software publishers.
In the event of reversibility, the service provider has a duty to advise and inform, and the customer has a duty to cooperate.

Basic clauses

• definition of customer and service provider,
• obligations of the parties, or reciprocal obligations,
• contract duration, renewal and termination conditions,
• insurance,
• costs,
• payment and price revision terms,
• a rights assignment clause (intellectual property, copyright, etc.), if required,
• liability clauses.

NB: to protect itself, the IT service provider can include a clause limiting liability to a certain amount.

Specific clauses

It's important to mention (for the service provider) or check (for the customer) what's included. Depending on needs and budgets, this can make all the difference.

Specific clauses include

• maintaining IT, network and telecoms systems in operational condition,
• improving system performance,
• assistance and training for users and administrators,
• consulting,
• technology watch,
• reporting on promised improvements, performance analysis,
• delegation of personnel (in the event of the development of a new IT project or a one-off need),
• data confidentiality and security.

For all these points, mention or check :

• Scope of services (including IT equipment, for example);
• Specific intervention requirements:
  • deadlines,
  • service providers (number, dedicated or random),
  • resources (hotline, travel),
  • days and times covered,
  • contacts (email, telephone, etc.);
• Equipment:
  • repair or replacement of equipment included or extra,
  • if chargeable: lead times and prices.
• Obligation to deliver results;
• Reversibility plan: the company can take over partial or total management and maintenance of its IT assets, usually in return for compensation.

Syntec informatique, the professional association of IT consulting and service companies, software publishers and technology consulting firms, offers a contractual guide to the SaaS (Software as a Service) model, with a mention of the reversibility clause in article 19 (pdf model here).

Cloud outsourcing

According to a study carried out by Les Echos in January 2013, outsourcing has grown considerably thanks to cloud computing services.
The popularity of cloud outsourcing extends from IT services such as data backup and storage, to customer relationship management, project management and more.
The term "third-party application maintenance" (TMA) is used when the outsourcer works in partnership with software publishers.

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SaaS data backup references

Beemo Data Safe Restore, several 100% secure backup offers

Beemo Data Safe Restore specializes in local and remote backups, and works exclusively with IT service providers and authorized resellers.
It guarantees VSEs and SMEs :

• security, confidentiality and integrity of backed-up data (encrypted, compressed),
• data restoration and 24/7 monitoring,
• automated backups, task management and updates,
• scalable backup solutions.

If your business is spread over several sites, you can opt for Beemo2Beemo, an in-house outsourced backup outside the cloud, with a Beemo box at each of your sites, which store their own data and synchronize.

Beemo2Cloud is a solution offering three levels of backup for maximum security, whatever the company and the volume of data to be stored:

• local backup with a Beemo installed on site,
• data duplication and hosting on servers in Marseille,
• ^2nd duplication and hosting on servers in Lyon.

The editor also adapts to healthcare establishments with Beemo2CloudHDS, approved by ASIP Santé (the French digital health agency), also with three levels of backup, but on servers managed by a healthcare data host (Datacenter Arrow ECS).

Last but not least, the BeeHive package enables Beemo-certified service providers to target very small businesses, with remote backup that doesn't require a box.

BeBackup, the scalable data hosting solution

BeBackup has been developed exclusively for IT service providers, resellers and corporate IT departments, from very small businesses to large corporations.
It enables them to be competitive throughout the entire data backup process, encrypted at source, compressed and protected against piracy.

Service providers can back up their customers' computers and servers :

• on their primary server,
• on their secondary servers, or on BeBackup servers, after data duplication,
• customers can restore their data independently if necessary.

BeBackup focuses on :

• a scalable hosting offering to help service providers start up or add to their server setup without excessive investment (hosted locally on the customer's premises, thanks to an integrated replication mechanism, in a datacenter or on their own premises),
• a high-performance "Client-Server" solution where the server performs intelligent tasks: exchanging fingerprints to optimize transfers, checks and replication,
• bandwidth optimization for customers with low-speed connections,
• an architecture comprising 2 BeBackup servers, a cost-effective alternative to RAID (Redundant Array of Independent Disks), a set of storage virtualization techniques.

Summary table of backup solutions