License vs. leasing third party data center space

245 pts.
Tags:
co-location
Disaster Recovery
DR
real estate
My organization's legal department is reviewing a DR co-location contract and they want to change the terms from a "license to use" data center contract to a "lease" agreement. From what I have been able to discern, the vendor should balk at this big time and I predict a significant issue to unfold. Do you have any stories or experiences regarding legal departments viewing agreements between an organization and a DR service provider as real estate space, and the rights that are associated with such? Thanks, Mike Mitchell
ASKED: October 11, 2007  6:28 PM
UPDATED: February 15, 2008  4:04 PM

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Wow talk about Deja Vu! I signed up just to answer this question. We had the same arguement with our counsel and the ISP who ran the DC. The ISP explained we are not leasing the space they are just allowing us to house x amounts of rack space within their racks. period end of story. The only other privileges we have are being able to run more data or phone lines to the unit.

Anything else is going to be a no-no with any normal ISP. If it is just a co-lo run by some local people you might be able to get away with it. But then would you want to leave THEM with your equipment?

I think not! Good Luck!

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  • Lightmike
    Thanks for sharing your experience JohnyAdmin! In our case we are getting a private suite with significant square footage, walled off to put our own cabinets and servers into. The vendor is eager for our business so it will be interesting. I won't hold it against them if they agree.
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  • Harry Waldron
    Mike shares a good point, that you should thoroughly research requirements with the DR hot or cold site services. This includes comparing both approaches using some of the following criteria: - Initial and on-going costs - Periodic testing costs - Physical arrangements for testing - Physical arrangements if a true disaster occurs - Could they handle a large-scale regional disaster (e.g., Hurricane Katrina) - Equipment and Communication restoration details
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