One of the most important parts of the equation when purchasing data center services is the legal agreement. Unfortunately, these contracts are too often either completely ignored by the client or reviewed by lawyers unfamiliar with the industry. As a result, both clients and service providers can be misled, leading to litigation costs and losses amounting to hundreds of millions of tenge.

Issues That Should Concern Data Center Service Buyers

Automatic Renewal Clauses

These provisions automatically enroll the client for an additional, often lengthy, service term without the need to negotiate or approve a contract renewal. In today's world, automatic renewal language is increasingly being removed from agreements with data center service providers, as most clients have refused to accept such provisions in recent years.

Contract Termination Terms in the Event of Recurring Outages

When a client experiences several outages or other SLA violations within a specified period, the client should be able to terminate the contract freely and without difficulty, without paying an early termination fee. If the client wishes to terminate the contract for convenience (that is, without cause), they are generally required to pay a percentage of the remaining amount of expected payments due under the contract for the specified term. This percentage ranges from zero to one hundred percent, depending on the remaining contract term. Although I have seen several cases in which a client successfully waived all early termination fees, this is uncommon. This is primarily because each provider's contract pricing is tied to a number of important financial variables.