Mitigating Risk in Co-Location Engagements
Yusuf Cassim, Vice President, Intellectual Property, Licensing and Contracts, The Charles Schwab Corporation
Given the state of the economy, businesses seeking to reduce IT costs have shown increasing interest in co-location and hosting arrangements. Many of these engagements, however, have gone horribly wrong (e.g., poor vendor performance, unexpected fees and cost overruns, delayed implementation, etc.), resulting in greater overall costs, lost revenue, and increased security risks. The siren song of co-location vendors is that they can provide a secure, reliable, and cost-effective alternative to the business expending its own limited resources to operate the systems internally. Unfortunately, aggressive marketing materials seldom result in similarly aggressive contractual protections. Hyperbole by co-location vendors about their capabilities needs to be backed up with specific, enforceable contract commitments.
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