DECEMBER 2020CIOAPPLICATIONS.COM9As the multi-tenant data center market has evolved and matured into a real estate asset class, many providers have restructured as Real Estate Investment Trusts ("REITs"). Current providers are more likely to negotiate leases on wholesale deals. Converting to a more tenant-favorable lease provides greater leverage, security, and protection for your business.Change is InevitableWhen it comes to technology, change is constant and inevitable. Developments in software, hardware, and network have a direct impact on your business and critical IT functions.To ensure your business is well-equipped to deal with this change, flexibility is key. The Cloud has become an essential element of businesses IT strategy. Effective and efficient hybrid cloud strategies often take years to establish and implement. Therefore, data center contracts should allow your business to embrace this change by enabling flexibility through strategic provisions and business terms. These could include rights of first offer, rights of first refusal,"power expansion/reduction rights, early terminations for convenience, ramp schedules, revenue/geographic portability, and more. Future-proofing data center contracts by securing flexibility provisions ultimately enable your business to drive your contracts, instead of your contracts driving your business. Risk-Avoidance is EssentialData protection, regulation, privacy and uptime are crucial to your data center contract. Negotiating strong Service Level Agreements(SLA) and credits can help mitigate risk and exposure to your business in a way that boilerplate and/or outdated SLAs would not. Most reputable providers promote 100% uptime ­ and many are willing to put those promises in writing.Ensure your data center provider meets and upholds the certifications and compliance standards required for your business and protects your mission critical operations.So, is it time for a Contract triage?Whether you have a single data center footprint or a large portfolio, there are likely significant savings to uncover in your existing contracts. There has never been a better time to re-evaluate and re-negotiate your existing data center contracts with a data center broker and advisor. The data center has evolved; make sure your contracts do too. Future-proofing data center contracts by securing flexibility provisions ultimately enable your business to drive your contracts, instead of your contracts driving your businessAli Greenwood
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