The Cloud Challenge for Contract Management

The rise of cloud computing has several IT titans pitting against each other to control your data. Cloud storage offerings from Amazon, Apple, Dropbox, Box, Google, Microsoft, and Tencent are upping one another almost every month.

So fierce is the competition among incumbents that they have initiated a “race to zero”. This competition is to see who will charge nothing – absolutely zero – for cloud storage services. While the ever-falling prices for cloud storage may tempt you to take your entire contract data to the cloud, here are four considerations that you should keep in mind.

1. Lack of Version Consistency

It happens across all companies. There is a tendency among employees to prefer one platform over another. There are some people that will defend Google Drive against all odds and other that can’t imagine working without access to Microsoft 365.

In large organizations, it can be challenging to force people to use only one type of cloud service. For example, an organization may have Dropbox as the official platform for storing files, but certain teams may opt to use internal servers or Apple iCloud to share files on a daily basis.

The constant importing and exporting of files from one platform to another forces users to work on files by first downloading them from the cloud and then working on those documents on their desktops. That process results in having two versions of the same file at the same time and nobody else knowing of their existence. The inability to keep immediate track of the latest version of a document is a serious hazard for any contract management process.

2. Lack of File Consistency

Depending in your selected cloud storage solution, you may be forced to stay with that solution for a long time. For example, Google Docs has gone to great lengths to maintain formatting when converting files from Google Doc formats to Microsoft Office formats, and back again.

However, there are still existing issues with documents that have complex item, such as table of contents, footers, headers, and footnotes. This means that employees are forced to spend a lot of time manually fixing items before they can make use of those files.

It’s understandable that companies want to maintain their cloud services proprietary and lock users within their specific work environments. The reality is that business, particularly those with teams spread across longs distances, need more flexibility. For better cross-platform integration, you can opt for offerings, such as Box and Dropbox, but there is still the  issue of…

3. Potential Access from Third Parties

One of the key principles of public cloud computing is multitenancy, meaning that multiple, usually unrelated customers share the same computing resources: CPU, storage, memory, namespace, and physical building.

While multitenancy allows more efficiency through the use of shared resources, it also creates new classes of vulnerabilities. There are several accounts of instance in which malicious hackers have been able to access data in the cloud.

  • December 2010: Users of Microsoft OneDrive could download other users’ contact list.
  • June 2011: During a 4-hour period, Dropbox accounts could be accessed without a password.
  • June 2014: Hackers wormed into Amazon Web Services customer Code Spaces.
  • August 2014: Malicious coders got away with thousands of risqué pictures from celebrities, including Kate Upton and Jennifer Lawrence, stored in Apple iCloud.

toring your photos from a family trip in Dropbox may be ok, not so much storing client financial data. Depending in your industry, your enterprise may only be able to take contract data to the cloud through adoptiong  contract management software that meets stringent guidelines, such as Sarbanes-Oxley and SAS 70 Type II.

4. Cloud Storage isn’t Built for Contract Management

Last but not least, the main issue with using a cloud storage solution for contract management processes is that the software wasn’t designed for that purpose.

On the other hand, a contract management system has the following features:

  • SAML Single Sign-on (SSO) federated authentication
  • Ability to set Full, Casual & Read-Only user options
  • Option for data and system integration (e.g. CRM, ERP, Accounting, SharePoint, SalesForce)
  • Capability to use e-signatures
  • Document routing
  • Email manager module
  • Server-side processing of workflows, alerts, and other processes
  • Library of contract templates and clauses

As you can see storage of files is just one of many features of a contract management system. Cloud storage can’t compete with the wide array of useful features to streamline your contract management processes.


The dropping prices from cloud services may tempt you to use cloud storage as the main way to handle your contract management processes. However, the lack of version consistency, lack of file consistency, and threat of potential access from unauthorized third parties make cloud storage a substandard platform to handle any contract lifecycle. Instead, it’s recommended to leverage a contract management system because the platform was built specifically to handle contract management processes.