Most of the IT outsourcing agreements will also have an element of hosting arrangement. When advising in respect of a hosting agreement the following issues should be given particular attention: 

·         Service levels covering website availability. The customer must balance its desire to have a website available on a 24 x 7 basis with the costs implications. The higher the percentage availability, the increased amount of back-up hardware infrastructure required to avoid downtime. A 24 x 7 support with a service level requiring 99.9% availability (measured over a whole year) permits a total downtime of less than nine hours a year, 99% of 87.6 hours a year and 97% of just under 11 days over the course of the year. While a website used for commercial transactions may require 99% availability, a website merely providing information about the company and its products or services may not justify the cost involved in requiring availability above 97%. Drafting of the service levels as well as the setting of the levels themselves will need careful attention. While in the above example, the service level is stated to be measured over the whole year, it may be more appropriate to measure the availability over a month or even a week. On the 24 x 7 model mentioned above, a site could go down for a whole business day, yet still meet 99.9% availability measured over a year which may be completely unacceptable to the customer. There may also be times when the server may need to be unavailable, for example, for routine maintenance and this will also need to be worked into the contract providing that such downtime will occur at no pick times.

·         Capacity and upgrades. The website server and Internet connection must be capable of handing the projected website usage. Pricing structures should be agreed such that if projected capacity is exceeded then additional capacity (whether this be a stand-alone server for the website or an increased bandwidth Internet connection) can be purchased at a pre-agreed price

.·         Back-up facilities and security. The agreement should clearly define the back-up procedures, such as a "hot" or "warm" back-up server, and security standards which should be employed, such as 64 bit or 128 bit encryption. (“Hot swap” is where a back-up server receives regular updates and is standing by to take over immediately if the main server fails. "Warm" is where the back-up server is turned on periodically to receive updates from the main server.) The supplier should be obliged to monitor the website for illegal access or hacking and this should be reported promptly to the customer.

·         Use of data. The supplier's obligations in relation to data should be clearly understood. If customer data is collected via the website, the website host may be deemed to be a data processor under the Data Protection Act. If personal data is sent outside the EU (even if simply bounced off a server based outside the EU) then the issue of data protection should be even more carefully considered. This may require the supplier to enter into a data transfer agreement with the customer to ensure that the rights in respect of personal data are adequately protected.

·         Migration. The level of assistance required by the customer to transfer the website from the incumbent supplier to the new supplier should be considered. This may include the transfer of domain names.

·         Services levels which should include response times, fix or workaround times and remedies if the levels fall beyond the agreed once. 

All articles are for general purposes and guidance only and do not constitute legal or professional advice. Copyright 2011 Anassutzi & Co Limited. All rights reserved. Information may be shared or reproduced only if accompanied by the author’s name and bio.