As companies struggle to cope with sluggish economy, "cloud computing" is often perceived as an easy way to quickly reduce costs, efficient information technology.? However, before heading off into the cloud, companies should be aware of the serious potential legal risks and implications of cloud computing.
"Cloud computing" be set countless different ways, but it usually refers to the use of remote computer networks or resources operated by third parties to process, store and manage data.? There are also countless service providers of different cloud, but some of the largest include Amazon, Google Inc. and Microsoft.? While a particular service offerings also vary, these large service providers to provide computing services basically almost based commoditized-just like the utility company provides electric, gas or water.
Potential savings is one of the best perceived benefits of cloud computing.? However, at least from the viewpoint of legal protections, one cannot help but and saying "you get what you pay for."
Form contracts or terms that offer cloud service providers usually (especially in online "click-through" agreements) are usually completely one sided and contain several terms, if any, to protect their customers against the risks of potential legal liabilities.? Large companies only have leverage to negotiate changes to these terms.? Often small companies will be faced with the situation, "take it or leave it".
Some of the most significant legal risks regarding link yopkd which data cloud computing cloud services provider.? Companies should be cautious if they store personal information or individually identifiable (such as customer names, addresses, credit card numbers, etc.) on the computing resources of the service provider's cloud, a location that may be unknown or subject to change.
Data security and privacy continue to be increasingly important social concerns, almost every country in the United States has now a law that requires reporting of people affected in the event of a security breach involving unencrypted personal information.? Some industries companies, such as health, finance and telecommunications, are subject to additional instructions regarding use and disclosure of personal information.? Further, if the information involved people from outside the United States, the privacy laws may be stiff for the other countries (such as EU Member States).
Cloud computing client loses control over physical its data by storing it "cloud", but it remains legally responsible for what happens to the data.? A company could face in the event of a breach by the cloud service provider (not to mention reputational damages) may be quite high.? Disclaimer form contracts usually offered by service providers of cloud not only broad exclude recovery of damages is likely to have suffered a security breach (i.e., incidental and consequential damages) but also internal damage total that can be restored relatively small amount.? Therefore, legal means with his company against a cloud service provider in such a situation can be severely limited.
Companies must carefully weigh the advantages of entrusting sensitive or personal cloud service providers.? At the very least, before entering into cloud computing arrangement, should manage the "due diligence" with respect to potential cloud service provider, investigate the actions, for example, where the provider's data centers are located, the types of security measures employed by the provider, if the provider's commit to third-party security assessments, meeting the security standards of a third party, or performing security audits, whether the data will be returned free of charge some form of standard industrial, And more.? Companies should examine carefully both standard contract offered by service providers of potential cloud and determine whether the negotiation of these terms is possible
As information technology continues to mature age of cloud computing is likely to increase.? But before joining this trend, make sure you are aware of potential risks.? Don't get even on just the promise of money damages.
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Milton l. Petersen is a partner with the information technology practice group of HunterMaclean. He reached 912-238-2629 or mpetersen@huntermaclean.com.
To learn that about Mr. Petersen click here to view his bio.
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