Business demand for technology contracts increases as digitalisation gathers pace
Digitalisation has brought an increased demand for technology contracting and transactions as well as for a leaner and more agile IT landscape. In order to achieve this streamlined goal, businesses need to harmonise their and their provider's IT – digitalisation cannot be achieved if there are too many non-standardised systems and providers – and adapt to agile methods and move to the cloud.
This means more technology contracts with providers – or hyper-scalers –which are getting larger, and IT transactions that are becoming bigger with more legal and business risks attached, whether liability, indemnity, cloud and data, or others. In this environment, businesses require flexibility to ramp up and ramp down activity in real time.
This advance means that those purchasing IT must prepare thoroughly. Attention needs to be given to contract drafting and the interplay of IT contracts. Negotiations need to take place with multiple vendors for different parts of the IT value chain. Providers, dependency on their products and the shift in bargaining power in their favour – even large buyers of IT might struggle with hyper-scalers – all need to be managed. Real and theoretical legal risks have to be weighed up. (Is an extensive warranty needed for a standard from a hyper-scaler?) And, to keep projects agile, conflict needs to be resolved amicably and swiftly.
Technology contracts and agile methods are a catalyst for digitalisation. New contracts and providers offer a road to the Cloud, while a single provider strategy offers a gateway to becoming leaner, faster and more agile. They can also help refresh technology. New technology contracts can harmonise and streamline legacy IT with fewer providers. Those looking to be at the vanguard of their sector can use new technology contracts to help create this advantage.
Osborne Clarke has worked with an array of international businesses on technology contracts, ranging from BioNTech and building its IT backbone to Fresenius and harmonising its global contracts, as well as assisting many other listed and unlisted companies with their IT contracting and technology requirements. Technology contracts can be daunting. We leverage our extensive international experience and deeply embedded sector and industry-standard insight to help businesses navigate the complexity and maximise their opportunities.
Technology contracts and agile methods are a catalyst for digitalisation."