Cloud Computing – Interesting Legal Issues


While most IT professionals are well aware of the evolution of Internet 2.0 computing services which offer on-line applications and large storage, in many ways this seems like an evolution of time-sharing from the 1960s when the likes of General Electric offered remote computing services to dumb terminals. Now Cloud Computing is one of the hot buzz words describing Software as a Service (SaaS) (sort of an updated term for ASPs- Application Service Providers) coupled with large amounts of storage. Major players are offering these services including IBM’s Blue CloudAmazon’s S3, Google’s Apps, and Salesforce’s CRM. These Cloud Computing services allow users to collaboratively work on projects over the Internet using proprietary and open source applications. 

Collaboration is Great

One of the great benefits of using Cloud Computing like wiki tools is allowing collaboration, and many large companies including IBM, Microsoft, and Oracle use collaboration tools to develop new technologies. It is hard to believe that Wikipedia started in 2001 and now has more than 2.5 million English articles since it reached a major milestone of 1 million articles in March of 2006. Clearly there are many other wiki success stories, but yet still skeptics about the accuracy and authenticity of the content.

How Secure is the Data?

Virtually no one reads the Click Agreement terms or Terms of Service when accessing Internet sites, downloading software, or registering on a website, nor do business people generally consult their attorneys about these Click Agreement terms or Terms of Service. So is any wonder that the vendors generally provide the services “as is,” without warranties and limit their liability and damages, and make jurisdiction and venue as inconvenient as possible to the user? Probably not, but when there are service outages that even the Service Level Agreements offer a reimbursement for down time, but not consequential damages. Another major concern is privacy of data since such laws such as HIPAA and the EU Data Directive restrict use of certain person information, and yet depending on how the Cloud Computing provider operates, these data privacy issues can be lost.


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