понедельник, 27 февраля 2012 г.
reorder point
Combining X-ray and ICT strategies lowers costs: a company specializing in Internet communications solutions shares its latest success in testing complex card designs. (X-ray Inspection).
Faster time to market much easier test management, higher test throughput, and test cost savings are the tangible, highly visible results of testing our newest generation of line cards at Alcatel-Canada. The results are particularly encouraging because we use a combination of X-ray inspection and simplified, reduced-probe in-circuit test (ICT) instead of the multiple--or split--ICT fixtures used with the previous generation of line cards.
We compared these test strategies using two very similar, complex cards (Table 1). They were evaluated with the same design-for-manufacturing analysis, built using similar components, designed with similar circuitry, and assembled with the same manufacturing process. These two cards provided the ideal case study for conducting an accurate comparison of two different test strategies.
Card Complexity Changes
Alcatel builds next-generation networks, delivering integrated end-to-end voice and data solutions to established and new carriers worldwide. Over the past few years, the complexity of the cards for these products has increased dramatically. Although physical card size has not changed much, designs have more densely packed an increasing number of electrical nodes and components into the area. This leaves less room for test access.
While the average number of nodes on these large cards continues to increase, the number of accessible nodes actually decreases. Tighter card design density, with larger device packages and more numerous bypass capacitors, affords less room for test pads. Card operation speeds also preclude test access to some nodes. These changes in card complexity have influenced our overall test strategy.
Test-Strategy Evolution
For several years, the 3070 ICT System from Agilent Technologies has been a cornerstone of our test process, providing full electrical test to verify the manufacturing process. This strategy was successful, but by 1999, we had begun to supplement ICT with X-ray inspection. The Agilent 5DX Automated X-Ray Inspection (AXI) System was our tool of choice, helping us locate and identify solder defects and missing components prior to ICT.
We were producing some cards with as little as 50% electrical test access. We also began building cards that exceeded the effective node count of our ICT systems. With these trends continuing, we saw a need to investigate methods that could increase the effective node count of our ICT equipment or reduce the probe access requirements on these and future cards.
The test system's effective node capacity is equal to the maximum in-circuit resources reduced by the average number of blocked and double-wired resources. For example, although we upgraded to a 5,184-node count system, the effective tester capacity was only 4,400 nodes. The average blocked testhead resources and the double-wired card nodes reduced the usable tester resources by 15% to 20%. We could reclaim some of these resources by using wireless fixtures; however, our card's maximum node size still remained significantly higher than the effective tester capacity.
To increase the testable in-circuit nodes, we used a multiple-fixture approach to ICT. This strategy, commonly known as a split-fixture approach, tests approximately half the card with one fixture and the other half of the card with another fixture.
Each fixture actually tests more than half of the card, redundantly probing several nodes. This ensures that each device is fully probed and each fixture probes power, boundary scan test access ports, and disable nodes. The cards are tested and repaired at each stage to ensure that all shorts have been removed prior to powering up the card.
To minimize the need for electrical test access, we initially used three techniques:
* Boundary scan interconnect test analysis.
* Alcatel custom resistor/digital cluster analysis (Figure 1).
* Alcatel custom analog cluster analysis.
We manually implemented these probe removal techniques on the initial card in this study. Since that development, we have produced custom scripts to identify potential probe removal for the resistor/digital cluster and analog cluster analyses. We also used the Agilent Access Consultant tool to remove boundary scan interconnect probes.
By the year 2000, with further increases in card densities, we observed process problems with the splitfixture test approach, including longer test cycle times, complexity of fixture handling, and increased fixture cost. We required more aggressive and targeted probe removal. Because of this, we supplemented our earlier proberemoval strategies with Agilent's AwareTest xi software.
A New Approach
AwareTest, described in Figure 2, combines the capabilities of the incircuit tester and the AXI system in a single test step, providing better coverage than either approach alone. AwareTest takes advantage of the defects detected by the AXI system and intelligently removes the need for in-circuit probe access without compromising our ability to verify proper component placement.
For example, when testing a digital device (U2 in Figure 2), AXI verifies that the device has been properly placed and that the device pins do not have any shorts or opens. The in-circuit tester then only needs to test a single device element to verify that it is operational, has been loaded with the correct part, and has not been loaded upside down.
Consequently, the software removes probe access from the device's other elements. Similar techniques intelligently target probe removal from other devices. This technique now is being used to test our most complex cards where physical access is an issue.
Test-Strategy Comparison
One of our first large-quantity cards tested by AwareTest was the 16MRL, a 16-channel Multi-Rate Line card. As we brought this card into volume manufacturing, we decided to compare its test results with those of the previous-generation 8MRL, an eight-channel Multi-Rate Line card. The 8MRL was tested using a multiplefixture ICT System.
The AwareTest software analysis was executed on the 16MRL prior to card layout. This enabled our CAD layout department to provide test access only to the electrical nodes identified by the software, rather than spending weeks to maximize electrical access.
We also used a slightly different approach in the X-ray inspection of these two cards. We tuned the AXI to minimize escapes on the 16MRL card but did not specifically do that for the 8MRL. Figure 3 compares the ICT results of these two cards.
Higher First-Pass Yields at ICT
We achieved a 59.8% first-pass test yield on the 16MRL card and only 26.7% on the split-fixture application. Several factors contributed to this result:
* The smaller, more reliable fixture produced a more stable and efficient test fixture/program.
* There was a reduction of fixture maintenance repair actions, 1.78% vs. 6.78%.
* There was a much lower occurrence of solder shorts and opens faults, 5.4% vs. 21.4%. The majority of this improvement was due to tuning the upstream AXI process to minimize escapes.
* ICT repair operators more quickly diagnosed true card failures and eliminated many card re-tests.
Higher Overall Test Throughput
On average, the 16MRL traversed the ICT repair loop only 0.75 times, compared to the 8MRL's 4.52 times.
Better Test Management
Initially, the eight-channel line card's ICT required three stages: shorts and unpowered testing with fixture A, testing with fixture B, and powered testing with fixture A. Using AXI prior to ICT ensured that the tested cards contained no shorts, so the multiple-fixture ICT process could be reduced to two stages: all tests with fixture A, then all tests with fixture B.
Even this simplified process caused a management nightmare, especially in the repair loop. Repair operators had to concentrate carefully to ensure that the repaired cards returned to the appropriate step of the multiple fixture test process. This, combined with the fixture-related failures, produced very inefficient and unsatisfactory overall results.
On the 16-channel line card, we perform only one ICT with a reduced set of probes. With only one fixture, the ICT management problems vanished.
Faster Time to Market
Incorporating probe removal into the card layout greatly simplified the CAD layout process, cutting the time to place test pads by more than half. This also helped start the test-development process earlier, resulting in quicker availability of the in-circuit tester. In addition, we tested the prototype cards using only the AXI, rather than waiting for the in-circuit fixture and program. This has resulted in faster turnaround at the prototype design stage.
Lower Test Cost
This newer process also provided a great economic advantage. Single-fixture cost is much less than half the cost of using multiple fixtures at ICT because of fewer nodes. Only 2,728 nodes are required, whereas each of the split fixtures had more than 3,100. Reduced fixture repair and higher ICT reliability also provide more efficient use of operator and system test time.
Conclusion
The 16MRL card turned on extremely well, producing a 93% initial volume production functional test yield, higher than the 90% yield of the eight-channel line card after a full year of production test modifications.
Our functional test goal was to maintain the existing yield and not impact it by changes to the upstream process. We clearly exceeded this goal with the AwareTest results on the 16MRL card.
[FIGURE 1 OMITTED]
[FIGURE 2 OMITTED]
Table 1 Comparison of 8MRL and 16MRL Cards Used in Test Study Card Name 8MRL Function 8-Channel Line Card Number of Electrical 4,508 Components Number of Electrical Nodes 8,294 Accessible Electrical Nodes 5,298 Size 18.9" x 13.7" Production Status Built for 1 Year Number of Cards Tested 844 in Study Probe Removal/Increased Multiple Fixtures Node Capacity Techniques Fixture A = 3,121 Nodes Fixture B = 3,162 Nodes Boundary Scan Resistor/Digital Cluster Analog Cluster Card Name 16MRL Function 16-Channel Line Card Number of Electrical 3,734 Components Number of Electrical Nodes 7,173 Accessible Electrical Nodes 2,728 Size 18.9" x 13.7" Production Status Initial Production Run Number of Cards Tested 542 in Study Probe Removal/Increased AwareTest Node Capacity Techniques Single Fixture 2,728 Probed Nodes Boundary Scan Resistor/Digital Cluster Analog Cluster X-RAY INSPECTION Reader Interest Please indicate your interest in this article. High Medium Low Interest Interest Interest 512 513 514
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About the Authors
Miro Kierkus, the manager of structural test engineering at Alcatel-Canada, has 12 years of design and test experience. He has a bachelor's degree in electrical engineering from the University of Western Ontario and a master's degree in electronics from Warsaw University of Technology. e-mail: miro.kierkus@alcatel.com
Roy Suttie is the test engineer at Alcatel-Canada and has 14 years of experience in the industry. Mr. Suttie received an electronic engineering technologist diploma from Conestoga College of Applied Arts and Technology. e-mail: roy.suttie@alcatel.com
Alcatel-Canada, 349 Terry Fox Dr., Kanata, ONT K2K 2E7 Canada, 613-591-3600
Analysts Question Prospects for Arizona-Based MicroAge to Survive Bankruptcy.(Knight Ridder/Tribune Business News)
Jul. 12--Three months into its Chapter 11 bankruptcy case, MicroAge Inc. barely resembles its old Fortune 500 self. The Tempe-based computer distributor, in a bid to reverse a string of hefty losses, has quietly but swiftly cut 1,600 jobs, closed all but one of its giant warehouses and shut down more than half of its computer integration branches. The company even moved its headquarters from MicroAge Way to a nearby company office to save money.
Still, there are substantial questions about whether MicroAge can survive.
Experts point to a crushing decline in sales an internal memo pegs the company's current annual sales at $1.5 billion vs. $6 billion last year -- a drop in its already razor-thin profit margins and a limited pool of cash. The cash crunch looms largest. The company drew down $146 million of a $210 million bankruptcy credit line just a couple of weeks into the Chapter 11 case, according to recently released results for the February-April period.
The remaining $64 million, added together with $28 million in the bank, gave MicroAge just $92 million in available cash as of the end of April, the most recent date for which financial information is available. That won't cover too many more quarters of $65 million in operating losses, as the company posted in the most recent period.
"If they don't stem the losses they're going to be out of cash in the next 1 1/2 quarters under their current financing facilities," said Grant Lyon of Odyssey Capital Group, a Phoenix financial advisory firm specializing in distressed companies. He's the court-appointed financial adviser for the Baptist Foundation of Arizona, which filed Chapter 11 late last year.
Jeffrey McKeever, MicroAge chief executive officer, said the company's current cash position is "very stable."
He said MicroAge is raising cash by collecting accounts receivable, reducing inventory and selling assets.
A sale of MicroAge Teleservices, a call center outsourcing operation with about 1,200 employees, is expected soon, McKeever said.
More job cuts are also expected. More than half the cuts so far have come from attrition.
"I'm not concerned about running out, based upon our current plans," McKeever said.
The company says it believes it has enough cash to cover operations through October, the end of its fiscal year.
Not too long ago, MicroAge was forecasting that it would be out of cash by the end of July, the end of its current quarter, according to a recent memo sent to employees.
It erroneously included that nerve-racking forecast in a memo last week recapping recent employee meetings with management. A clarification was quickly issued. "Actions have been planned and implemented that will ensure that we will not run out of cash by the end of July. This includes recent actions taken to reduce expenses," the memo said.
Cash problems are inherent in bankruptcy cases, of course. What makes MicroAge's situation so precarious is that the company's core business is crumbling.
Its largest subsidiary, computer middleman Pinacor, saw its sales plunge 70 percent in the second quarter, to $454 million.
There's a variety of factors at fault, from sweeping changes in the ways computers are bought and sold in the Internet age to MicroAge's financial problems, which caused many suppliers to cut the company off.
While MicroAge had hoped the bankruptcy filing and the protections it provides would ease the supply problem, its recent financial report with securities regulators suggests otherwise.
"Pinacor revenue has continued to decline (this quarter) due to product supply issues," the company said. "Pinacor has begun streamlining its operations to become a smaller and more focused distributor."
McKeever said Pinacor's focus now is on equipment for computer telephony integration. He said the sector, which has higher profit margins than the traditional computer wholesale business, focuses on hardware that links computers and telephones.
Most in the industry have written off Pinacor, until recently one of the top five distributors in terms of sales. In recent Wall Street research reports, analysts credit improving results of industry giants Ingram Micro and Tech Data to the "exit" of Pinacor and struggling competitors Inacom and CHS Electronics. All three are in Chapter 11. Inacom filed last month and immediately said it was ceasing operations. That company had about 650 workers in the Valley.
The liquidation question regularly comes up in discussions of MicroAge's future, especially among employees. The company, which has been candid with its employees about its struggles, said in an employee memo Monday that rumors of a pending Chapter 7 filing are incorrect.
McKeever notes that MicroAge is still winning new business. Its integration business, MicroAge Technology Services, this week said it was selected to outfit Arizona's 228 school districts with 30,000 to 50,000 computers over the next few months.
And the company is still counting on its new e-business strategy, where it's an electronic middleman, though it hasn't ramped up as quickly as hoped.
"It's a little early to write us off," McKeever said. "We're still a $1.5 billion company."
Lyon, who has no ties to MicroAge and reviewed the company's financial filings at The Arizona Republic's request, is less sanguine about the company's chances unless things turn around quickly.
"The game is to try to reorganize while you still have, one, a core business to reorganize and, two, the liquidity to do it," he said. "There may not be a business here to reorganize if they don't stem these losses."
To see more of The Arizona Republic, or to subscribe to the newspaper, go to http://www.azcentral.com
(c) 2000, The Arizona Republic, Phoenix, Ariz. Distributed by Knight Ridder/Tribune Business News.
Compaq Corrects Spelling of Name; Darryl Peck sted Darrell Peck.
In BW0150, (TX-COMPAQ) Launches New U.S. Internet Program for Dealers, eighth graph, fourth line should read xxx said Darryl Peck, President and CEO, Cyberian Outpost (sted said Darrell Peck, President and CEO, Cyberian Outpost).
воскресенье, 26 февраля 2012 г.
XACCT and MaxBill partner to deliver support for enhanced network services; MaxBill integrates XACCTusage to provide a total solution for service providers.
M2 PRESSWIRE-4 February 2000-MAXBILL: XACCT and MaxBill partner to deliver support for enhanced network services; MaxBill integrates XACCTusage to provide a total solution for service providers (C)1994-2000 M2 COMMUNICATIONS LTD
RDATE:02022000
Israel and Santa Clara, California -- XACCT Technologies Inc. the leading provider of business infrastructure solutions for IP networks and MaxBill Ltd., an innovative provider of cost-effective OSS Customer Care and Billing solutions for the converging telecommunications and utilities industries, announced the formation of a strategic partnership. Under the agreement, the two companies will integrate the MaxBill Customer Care and Billing system with XACCTusageTM, offering service providers a complete package for convergent services billing.
The integration of MaxBill and XACCTusageTM will enable MaxRate, MaxBill's sophisticated rating engine, to harness billable usage records captured and enhanced by XACCT's innovative IP Mediation technology. With this combined solution, Service Providers will be able to define, offer and bill for enhanced value-added services and creative service packages. Customers will receive an invoice for their Internet services in formats similar to the telephone bills, based on various transactions and parameters, such as bandwidth, content and quality of service.
"Moving into the next generation of Internet-based services, traditional flat rate pricing and billing models are fast becoming obsolete," said Eric Gries, CEO of XACCT Technologies. "Service Providers are looking for ways to develop and deploy new revenue-generating services, and to price them in meaningful ways. We're very pleased to partner with MaxBill and provide our customers with a complete solution enabling them do so, cost-effectively."
"As enhanced network services, such as IP telephony, streaming multimedia and high-end data transfer emerge, the need for Service Providers to have the tools to offer and bill for these services increases dramatically. The power of XACCTusageTM to extract meaningful usage records coupled with the strength of MaxBill to incorporate these and additional usage records from other sources into the overall functionality of MaxBill will deliver a comprehensive solution for Service Providers to offer these and other diversified and convergent services," said Michah Himmelman, President of MaxBill.
Comprehensive Data for Billing
XACCT's flagship product, XACCTusageTM, provides a single point of interface between the IP network infrastructure and the Customer Care and Billing applications for usage data collection as well as automated service provisioning. This multi-source, multi-layer mediation solution captures comprehensive and accurate usage data from a multitude of network elements such as routers, switches, firewalls, and application servers and refines it into XACCT Detail Records or XDRs that are similar to the Call Detail Records (CDRs) generated by telephone switches (exchanges). Service providers can use XDRs to generate flexible, innovative pricing models and usage-based bills.
By leveraging the end-to-end, automated User Account Provisioning capabilities of XACCTusageTM, service providers can implement self-care or self-registration programs and thus lower call-centre costs. Automated provisioning also lets service providers benefit from instant service activation and revenue capture.
About MaxBill Ltd.
MaxBill Ltd. is an innovative provider of cost-effective OSS Customer Care and Billing solutions for the converging telecommunications and utilities industries. MaxBill's Customer Care and Billing system gives Service Providers with customer-centric functionality to attract and expand profitable customer relationships. MaxBill provides pro-active functionality and integrated tools to support the processes of customer initiation, customer activation, customer care, order management, service provisioning, usage rating, invoicing, accounts receivable, collection and reporting. MaxBill is headquartered in Israel and has subsidiaries in North America and Europe. For current product and company information, please visit MaxBill's web site at www.maxbill.com.
About XACCT Technologies XACCT Technologies, Inc. is headquartered in Santa Clara, Calif. The company develops a new class of intelligent software solutions that enable Service Providers to design and execute innovative revenue-generating services and programs.
XACCT and its product have received the following awards and citations:
* Data Communications magazine recognised XACCT as one of the "Top 25 Hot Start-ups of 1998" and named XACCTusage as one of the "Hot Products of 1999." [middle dot] XACCT was one of the six companies named to the "Winners Circle: Software Companies to Watch" in Telecommunications magazine's March 1999 issue.
* XACCTusageTM received "Most Innovative Billing Product" recognition at the Billing Systems 1999 Conference and Exhibition in April 1999.
* Internet Telephony magazine selected XACCTusage as "Product of the Year" in the Billing category in its November 1999 issue.
A privately held corporation, XACCT is funded by venture capital investors.
More information is available at http://www.xacct.com.
CONTACT: Tony Miller, Business Manager MaxBill Ltd. Tel: +1 972 3 930 55 20 Fax: +1 972 3 930 55 21 e-mail: tonym@maxbill.com WWW: http://www.maxbill.com Anil Uberoi, VP Marketing, XACCT Technologies Tel: +1 408 654 99 00 Fax: +1 408 654 99 04 e-mail: anil@xacct.com WWW: http://www.xacct.com Charlotte Gutman, CGP Tel: +32 2 375 21 00 Fax: +32 2 375 91 62 e-mail: cgp@cgp.be www.cgp.be Sharon Frais C.G.P. - Communications for Genial Products s.a. Tel: +32 2 375 21 00 Fax: +32 2 375 91 62 e-mail: sharon@cgp.be WWW: http://www.cgp.be
((M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com)).
Motorola Mobility to Discuss How Convergence Impacts Mobility, Media and Digital Home Management at CONNECTIONS™.
Parks Associates today welcomes David Grubb III, Vice President, Architecture & Strategy, Converged Experiences, Motorola Mobility, as the opening keynote for CONNECTIONS™: The Digital Living Conference & Showcase on June 28 at 4:20 p.m. The international research firm will host CONNECTIONS™ on June 28-30 at the Santa Clara Convention Center.
In his Keynote "Converged Experiences," Mr. Grubb will discuss the impact of the Internet and mobile networks on consumer expectations for home management, content access and more immersive, converged experiences. Over 2 billion people worldwide will have a smartphone by 2015, according to Parks Associates. The spread of these devices, along with tablets, Wi-Fi, and 3G and 4G technologies, is blurring the lines between wireless vs. wireline and home vs. mobile experiences.
"Over 60% of U.S. smartphone users are interested in an app that syncs files across multiple mobile devices," said Kurt Scherf, VP, Principal Analyst, Parks Associates. "Once consumers have these advanced devices in hand, their expectations for home management and content access expand. Mr. Grubb has invaluable insight into the implications and challenges as cloud media and connected and mobile CE redefine the digital living markets, and we look forward to his keynote at CONNECTIONS™."
In his keynote, Mr. Grubb will discuss the future vision for the home and mobile consumer experience and how the industry can best realize the potential of convergence. He will also examine the distinct kinds of convergence happening today. For example, mobility converges with computing through the advancement of powerful smartphones and tablets. Mobility is also converging with media through the growth of multiscreen TV services and companion devices. Finally, the emergence of IP content delivery and interactive services is driving the convergence of media, home management and the Internet.
For information about CONNECTIONS™, visit www.connectionsus.com. About CONNECTIONS™ CONNECTIONS™: The Digital Living Conference and Showcase, hosted by leading research firm Parks Associates with support from the Consumer Electronics Association (CEA) [R], is the premier executive event focused on the market developments and growth factors for advanced digital lifestyle solutions. http://www.connectionsus.com MOTOROLA and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC.
Keywords: Leisure, Mobile Network, Networks, Parks Associates.
This article was prepared by Telecommunications Weekly editors from staff and other reports. Copyright 2011, Telecommunications Weekly via VerticalNews.com.
Cloud Computing What Does It Actually Mean And What Are The Issues For Lawyers That It Raises?
1. Introduction
In traditional computing infrastructure, a computer's operating system (e.g. Microsoft Windows), applications (e.g. Microsoft Office) and data are stored on an individual user's computer. In the office environment data is usually stored on servers (often within the same building) which are then accessible by the rest of an organisation.
Cloud-computing is a different approach to IT infrastructure. Information, software or other IT services are stored and accessed remotely via a supplier's servers connected to the internet, rather than on individual computers or on private servers. This is not a new concept. Anyone who has a web-based email account such as Hotmail has been able to use a simple form of cloud-computing since 1997.
While cloud services have been available for some time, the growth and spend in this area has sharply accelerated in recent years. In 2009 Gartner estimated that the global market for cloud services had a value of around $46 billion with a predicted rise to around $150 billion by 20131 . However, a lack of clarity and consistent opinion as to the perceived risks of cloud services has been problematic for both providers and consumers. This has led to difficulties for both in contractually allocating legal and commercial risk, in an environment where a key driver towards the cloud for many organisations is the need to control costs.
This article will outline the most common types of cloud services and provides an overview of some of the prominent legal and contractual issues present when utilising such services.
2. Common types of cloud-computing
The most common types of internet based IT services that are widely referred to as 'cloud computing' are:
2.1 Software as a Service ('SaaS')
In SaaS, software applications are run on the provider's system and accessed by a customer via the internet usually through a web-browser. This means that the software is not located on the user's computer or within a business's servers but within the SaaS provider's facilities.
SaaS is designed on a one-to-many model meaning the software and its associated host hardware can be used to serve many customers simultaneously.
The advantages of SaaS are:
minimal configuration costs as SaaS is designed to be run and accessed remotely;
reduction in on-going maintenance and support costs as economies of scale are achieved through the one-to-many model; and
the costs of keeping 'up-to-date' are reduced. The supplier can roll out new versions and upgrades on a regular basis to all customers simultaneously.
2.2 Infrastructure as a Service ('IaaS')
IaaS provides a customer with remote access to certain pre-configured hardware which the customer is able to control and use as if it had access to the same physical hardware on-site. A common IaaS offering is a 'virtual server' which allows a customer to use the functionality of a traditional server remotely.
The term 'virtual server' is used as the customer is not accessing an individual instance of hardware, rather it is using a set proportion of the shared resources of a powerful data centre. In this form of IaaS, the supplier is only responsible for the maintenance and running of the 'virtual server' and its underlying hardware. The customer is responsible for running and maintaining the operating system and all software and applications running on the 'virtual server'2.
The main advantages of IaaS are the reduction in infrastructure investment, maintenance, refresh and running costs for every element of IT infrastructure which is accessed remotely.
2.3 Platform as a Service ('PaaS')
PaaS is the delivery of IaaS with the addition of an operating system being provided by the Supplier. This allows a customer to run software on a supplier's servers within the pre-configured virtual operating system. Under PaaS, a customer has limited control of the underlying operating system and hardware resources and the customer is only responsible for selecting and managing the software that is run on the virtual operating system3. PaaS combines the advantages of SaaS and IaaS.
2.4 Everything as a Service ('EaaS' or 'XaaS')
This is a hybrid term referring to a combination of SaaS, IaaS and PaaS
3. Are IT outsourcings and cloud services the same thing?
Cloud services contracts share a number of similarities with traditional IT outsourcings as both:
focus on the performance of the services being provided by the supplier;
aim to achieve efficiencies and reduce costs at levels;
avoid/reduce the extent the customer's capital is 'locked up' in IT infrastructure;
involve the remote provision of services; and
are typically embodied in a contractual structure which contains a significant level of detail.
Due to these similarities, there is a corresponding overlap of the contractual and legal considerations. However despite this, there are fundamental differences between the two which means a standard IT outsourcing contract will not necessarily 'work' for cloud service deals:
GRAPH
In light of these differences, approaching a cloud service deal as a traditional IT outsourcing will not be appropriate for all aspects of the contract.
4. Legal/Contractual issues
Cloud-computing arrangements raise a variety of legal and contractual issues. Many of these are not specific to cloud-computing arrangements but apply more generally to many types of technology services agreements.
Legal Issues
4.1 Data Protection Act 1998
The Data Protection Act 1998 (the 'DPA') governs the use of data that identifies individuals (known as 'personal data'). Those who control the processing (meaning storing, recording, transmitting, etc.) of personal data must comply with the eight Data Protection Principles (the 'Principles') contained in Schedule 1 of the DPA (as well as a number of other provisions).
It is likely that the utilisation of cloud services will involve the transfer and/or storage of personal data between the customer and the provider. Users of cloud services will need to ensure that their cloud arrangements comply with the DPA4.
The key relevant Principles are:
4.1.1 First Principle - personal data must be processed fairly and lawfully
While a number of caveats exist, consent of the individual must usually be obtained in order to process personal data. Consent can generally only be given when an individual has been provided with sufficient information to make an informed decision.
Cloud-computing issue: Providers store and process data for many customers simultaneously utilising an array of different hardware spread over a number of physical locations within the cloud provider's data centre. It is arguable whether informed consent can actually be given by the individual due to the lack of certainty or understanding as to how and where the data is to be processed and stored.
4.1.2 Seventh Principle - appropriate technical and organisational measures must be taken to prevent unauthorised or unlawful processing or accidental loss or destruction of personal data
The Principle enshrines the concept that the standard of protections for personal data will be implemented according to the type of information, the cost of implementing solutions and the potential damage which would be caused by its loss.
Cloud-computing issue: Personal data 'in the cloud' may be spread over a number of physical locations within a data centre. Compliance with this may be harder to practically achieve and enforce. Customers will need to consider what access, if any, the cloud provider will have to the data stored on their systems, whether the data should be encrypted and what back up and data recovery procedures are in place. Customers may also find that they are unable to access a cloud supplier's facility to audit security measures due to the supplier's pre-existing contractual commitments to other customers.
4.1.3 Eighth Principle - personal data must not be transferred to a country outside of the European Economic Area ("EEA") unless that country ensures an adequate level of data protection
If personal data is to be transferred outside of the EEA, then that in itself is a potential breach of the DPA without certain conditions being met. The European Commission has established a formal procedure for certifying countries which have in place adequate data protection rules, however this list is limited5.
Cloud-computing issue: Cloud-computing providers may be offering cloud services from a location outside of the EEA. Organisations based in the EEA need to ensure that any cloud services used will be provided from within the EEA or a certified country. If the provider is outside the EEA and not a certified country, the customer will need to determine whether compliance through another permitted means is possible, such as utilising the 'Model Contractual Clauses' issued by the European Commission or determining whether the EU-USA Safe Harbour regime applies.
4.1.4 MiFID/SYSC rules
In the UK, FSA regulated entities are likely to be bound by the provisions of Markets in Financial Instruments Directive6 ('MiFID'). As part of the implementation of MiFID obligations in the UK, the FSA has issued the SYSC Rules7. SYSC Rule 8 applies to regulated businesses that outsource an operational function that is 'business critical'. In complying with this rule, regulated business must (amongst a number of other provisions) ensure that confidential information relating to customers is protected8, and that the business, its auditors and the FSA can access the data and the premises related to outsourced activities.9
Cloud-computing issue:These SYSC Rules are not easily reconcilable with cloud computing arrangements. As mentioned above, access to the supplier's data centre may not be possible and it may be impossible to tell exactly where all data is physically located at any one time. This inherent feature of cloud services means securing or demonstrating compliance with the above rules may be problematic and securing customised solutions which comply with the above may erode the cost savings which the utilisation of cloud services sought to achieve.
Contractual Issues
The following are a number of issues which should be considered as to why traditional IT outsourcing provisions may not be suitable for cloud deals:
4.2 Service Performance:
The IT Outsourcing Approach
In outsourcing deals customers often seek supplier performance warranties against specifications or requirements e.g.:
'Supplier warrants....it shall: (i) perform the Services using good industry practice and all due skill, care and diligence; and (ii) shall meet the Customer's Requirements detailed at Schedule [X].'
Cloud-computing Issues
The nature of the one-to-many model means that cloud services are not usually adapted to the customer's requirements outside limited parameters. This less flexible approach is reflected in the warranties that a cloud supplier is prepared to offer.
Typically cloud suppliers will only offer limited warranties of performance, confined to providing the cloud services in accordance with 'good industry practice' or 'skill' and 'care' even though, in such an immature market-place, it is not known what such standards mean.
4.3 Service Levels
The IT Outsourcing Approach
Outsourcing service levels attempt to give customers confidence that the service they have outsourced will be performed to an acceptable level. Often this will include a metric targeting the level which the customer expects the service to be available.
Cloud-computing Issues
Where service provision is entirely over the internet, any 'end-to-end' service level will need to cover availability of the internet. The last three years have seen numerous high profile examples where internet availability has been affected by factors no supplier of cloud service would take responsibility for, e.g. political unrest10, denial or service attacks11 and accidents cutting submarine telecommunication cables12.
To date, few cloud service providers have been offering service levels that take responsibility for internet performance leaving customers to bear this risk. Recently however there are examples of large providers accepting this risk and offering 99.9% uptime SLAs to customers13.
4.4 Audit
The IT Outsourcing Approach
A requirement that a customer can audit the service provider is often required as simple good practice. In regulated sectors such as financial services 14 or public sector procurement 15 this may be a stronger requirement.
Cloud-computing Issues
Suppliers will find it difficult if not impossible to identify the exact location of individual services/data for an individual customer and will not usually allow access to service provision locations due to the obligations owed to other customers.
4.5 Termination/Exit
The IT Outsourcing Approach
An outsourcing contract will usually contain terms obliging the supplier to return the customer's information and materials to enable the services to be brought back 'in-house' or transition to a replacement supplier.
Cloud-computing Issues
There are no cloud industry data standards for transitioning between suppliers. Cloud customers should be wary therefore of being 'de facto' locked-in to continuing to use a supplier by not being able to easily transition services to a new supplier. Customers should therefore look to establish an exit plan pre-contract which will include the details of how, when and in what form the customer's data will be returned.
5. Conclusion
Businesses need the efficiencies and cost savings that cloud-computing can bring regardless of the operational and legal risks that can be identified. This places a strain on the agreements that allocate the risks and rewards of cloud computing between customers and suppliers. What is clear is that whilst the technology might be undergoing evolutionary development, the approach to the contracts that govern them might need to be revised in a more revolutionary way to adapt to the new delivery method.
Footnotes
1. http://www.gartner.com/DisplayDocument?id=914826 http://ec.europa.eu/competition/consultations/2010_horizontals/draft_specialisation_ber_en.pdf
2. Amazon's Elastic Compute Cloud (EC2) is an example of this form of IaaS.
3. Microsoft's Windows Azure is an example of PaaS.
4. In April 2010 the European Commission noted that cloud computing raised 'challenges to data protection' and that 'risks to privacy and the protection of personal data' due to this activity are increasing. http://ec.europa.eu/justice/news/consulting_public/0006/com_2010_609_en.pdf.
5. e.g. Israel, Switzerland, Argentina, Guernsey, the Isle of Man, Jersey and Canada.
6. 2004/39/EC.
7. S enior Management Arrangements, Systems and Controls Rules http://fsahandbook.info/FSA/html/handbook/SYSC.
8. SYSC Rule 8.1.8(10).
9. SYSC Rule 8.1.8(9).
10. http://www.bbc.co.uk/news/technology-12306041
11. http://www.bbc.co.uk/news/technology-11980125
12. http://news.bbc.co.uk/1/hi/technology/7228315.stm
13. http://www.informationweek.com/news/infrastructure/management/showArticle.jhtml?articleID=229100165&cid=RSSfeed_IWK_All
14. See above and the Senior Management Arrangements, Systems and Controls - SYSC Rule 8.1.8 - http://fsahandbook.info/FSA/html/handbook/SYSC/8/1
15 OGC Model Terms and Conditions of Contracts for Services - http://www.ogc.gov.uk/Model_terms_and_conditions_for_goods_and_services.asp
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Mr Andrew Joint
Kemp Little LLP
Cheapside House
138 Cheapside
London
EC2V 6BJ
UNITED KINGDOM
Tel: 2076008080
Fax: 2076007878
E-mail: Elizabeth.Boulton@kemplittle.com
URL: www.kemplittle.com
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