Vendor Due Diligence: Security, SLAs, and Exit Clauses

Background and scope of review

Vendor due diligence typically starts with scoping. Teams classify the vendor by data sensitivity and business criticality, then map the service to the systems and users that will interact with it. A cloud file storage provider like Microsoft OneDrive will touch different risks than a payments gateway such as Stripe, so the questions and evidence requested may differ. The goal is to right size the review so that low risk tools do not stall, while high risk engagements receive deeper scrutiny.

Security assessment focuses on controls, certification, and evidence. Buyers often request SOC 2 reports, ISO 27001 certificates, or summaries aligned to NIST or CIS controls. For identity and access, the review may cover SSO support with providers like Okta, MFA options, role based access, and logging. Data protection questions commonly address encryption at rest and in transit, data segregation in multi tenant environments, backup cadence, and recovery tests. Where applicable, privacy reviews consider data processing agreements, international transfers, and regional data residency.

SLAs translate expectations into measurable targets. Typical areas include uptime, response and resolution times for support tickets, recovery time objectives, and recovery point objectives. A collaboration platform similar to Google Workspace might commit to an availability target and offer service credits when it is not met. Credits may not fully offset business impact, so teams document escalation paths, incident communication cadence, and the vendor’s change management approach.

Exit clauses prepare for contract end or failure scenarios. Contracts often require the vendor to provide timely data export in machine readable formats, a defined deprovisioning process, and secure destruction of residual data. For larger systems, buyers may ask for migration assistance, transitional access, or a short extension at legacy pricing to reduce disruption. In software licensing, some organizations still use source code escrow for on premises components, although this is less common in pure SaaS models.

Trends and current practices

Due diligence is moving from point in time questionnaires to continuous monitoring. Third party risk platforms like OneTrust, SecurityScorecard, and Bitsight offer external signals on vulnerabilities and posture that can augment annual reviews. Some teams add lightweight quarterly attestations for critical vendors to confirm no material changes in hosting regions, sub processors, or encryption practices. This rhythm balances diligence with vendor fatigue.

Contracts are becoming more explicit about shared responsibility. With hyperscale hosts such as AWS, Azure, or Google Cloud underlying many services, vendors clarify which party handles patching, key management, network segmentation, and incident response. Buyers ask for clear diagrams and RACI tables that show who does what during an event. This clarity helps prevent gaps that emerge when each side assumes the other has a control covered.

SLA language is trending toward outcome clarity and transparency. Beyond raw uptime, teams request public status pages, postmortems after major incidents, and defined timelines for customer notice. For support, some enterprises prefer priority matrices that tie response times to business impact rather than severity labels alone. Where services are usage based, rate limiting and fair use details are being spelled out to reduce disputes.

Exit planning is gaining detail early in procurement. Buyers ask vendors like Salesforce or ServiceNow to provide sample export files, data dictionaries, and throughput estimates before signing. For collaboration tools such as Slack, customers may test export options in a sandbox to confirm that message history, files, and metadata are retrievable. These early checks can prevent unplanned consulting costs at the end of the relationship.

Expert notes and practical tactics

Map controls to risk tiers first. A marketing tool with anonymous analytics may need lighter evidence, while a healthcare claims processor requires deeper validation. Maintain a control matrix that links each requirement to acceptable evidence types, for example SOC 2 plus bridge letter, pen test summary from a firm like NCC Group, or configuration screenshots.

Negotiate SLAs with context, not just numbers. Service credits are helpful but rarely compensate for lost revenue, so include rights to terminate for chronic shortfalls and to receive cooperation during transition. Add operational hooks such as quarterly service reviews with named vendor contacts, change freeze notifications during peak periods, and access to status APIs where applicable. Run tabletop exercises that simulate a vendor outage to pressure test comms and roles.

Design the exit path as a reversible checklist. Specify export formats, encryption for data in transit to you, deletion certificates, and the timeline for wiping backups. For complex platforms like Shopify or HubSpot, document how to extract both content and configuration, since recreating settings often takes longer than moving data. Keep a short list of viable alternatives so that business owners understand switching costs before problems arise.

Summary

Vendor due diligence aims to align control, performance, and flexibility before commitments are made. Security reviews surface how data will be protected, SLAs formalize expectations for reliability and support, and exit clauses reduce lock in and confusion when change is needed. Organizations that calibrate depth to risk, verify evidence, and pre plan exports tend to navigate vendor relationships with fewer surprises.

By InfoStreamHub Editorial Team - November 2025