IT outsourcing and data backup contract

appvizer has decided to take a closer look at IT outsourcing contracts- what a programme!
Whether you're an IT service provider, a software reseller/installer, or a corporate client, 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 the backup of IT data, and what are the current market benchmarks for SaaS solutions?
These are just some of the questions we'll try to answer here.
Warning: by the end of this book, you'll know all there is to know about IT outsourcing contracts!

See all software IT Services

IT outsourcing: definition

Quite simply, IT outsourcing is the outsourcing of services.
IT outsourcing is the practice of delegating all or part of an information system (IS), its management, operation, optimisation 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 depending on requirements).

Different types of IT outsourcing

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

• management of the IT infrastructure ;
• Application outsourcing: the management of software and software packages that remain the property of the customer (ERP, CRM, etc.);
• Application supply outsourcing: the management of software and software packages that the customer does not own (rental, subscription);
• Global outsourcing: everything mentioned above.

Outsourcing may involve :

• installation of IT equipment,
• 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 consultancy,
• IT audits.

The IT infrastructure

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

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

Advantages, disadvantages and risks of IT outsourcing

Advantages (for the customer)

• Concentration on its own activity, its know-how, its core business,
• Cost savings compared with hiring an in-house IT specialist,
• Savings on indirect costs (electricity, telecoms and IP),
• Genuine collaboration with expert IT service providers,
• A driver for transformation, improving performance and processes,
• 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 permission to modify or install its software on another machine, before signing the outsourcing contract.
It is 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 risks include

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

Setting up facilities management

Several phases:

1. Opportunity and feasibility study by the customer,
2. Decision-making and drafting of specifications,
3. Launch of a call for tenders, or short listing of several outsourcers,
4. Receipt of proposals from service providers,
5. Choice of service provider,
6. Technical and legal audit,
7. Drawing up and signing the outsourcing contract,
8. Partial or total transfer of responsibility between the customer and the service provider,
9. Contract upgrades if adjustments are required,
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 :

• a presentation of the company (different sites, contacts dedicated to monitoring the service, etc.),
• a presentation of the sector and its specific regulatory requirements,
• IT resources (network, servers, workstations, users, etc.),
• constraints (dates, schedule, budget),
• the services required (corrective, remedial and upgrade maintenance, the three services, IT back-up, etc.) and their scope,
• the support required (support, training, etc.),
• the changes envisaged,
• 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 any contract, the IT outsourcing contract is complex.
It is a highly technical service contract containing basic and specific clauses. It is drawn up by the service provider.
It is advisable for both parties to be assisted by a competent lawyer when drawing up and concluding this type of contract, or in the event of a dispute during its execution.
The term is always for several years, 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 the hardware, data and information required for the service to run smoothly, and to check that there are no intellectual property issues with certain software publishers.
If reversibility is to be implemented, the service provider has a duty to advise and inform, and the customer has an obligation to cooperate.

Basic clauses

• definition of the customer and the service provider
• the obligations of the parties, or reciprocal obligations,
• the conditions governing the duration, renewal and termination of the contract,
• insurance cover,
• the cost,
• the terms of payment and price review,
• a clause assigning rights (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

You need to mention (for the service provider) or check (for the customer) what is included. Depending on needs and budgets, this can make a difference.

Specific clauses include

• Maintaining the IT, network and telecoms system in operational condition,
• improving system performance,
• assistance and training for users and administrators,
• consultancy,
• 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 :

• The scope of services (including IT equipment, for example);
• The specific nature of the work:
  • deadlines
  • the people involved (number, dedicated or random people),
  • resources (hotline, travel)
  • days and times covered,
  • contacts (email, telephone, etc.);
• Equipment:
  • repair or replacement of equipment included or extra,
  • if chargeable: timescales and prices.
• Obligation to deliver results;
• The 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 consultancy and service companies, software publishers and technology consultancies, offers a contractual guide to the SaaS (Software as a Service) model, with a reference to 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 significantly thanks to cloud computing services.
The popularity of cloud outsourcing extends to IT services such as data backup and storage, as well as 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.

See all software IT Services

SaaS data backup references

Beemo Data Safe Restore, several 100% secure backup offers

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

• the security, confidentiality and integrity of backed-up data (encrypted and 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 on each of your sites, which store their own data and synchronise.

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 is also adapting 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).

Finally, the BeeHive package enables Beemo-certified service providers to target very small businesses specifically, 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 groups.
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 main server,
• on their secondary servers, or on BeBackup servers, after duplicating the data,
• Customers can restore their data independently if necessary.

BeBackup focuses on :

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

Summary table of backup solutions