Legal implications of cloud computing

6 09 2011

Cloud computing, which is generally understood as a model for enabling on-demand network access to an elastic pool of shared computing resources that can be rapidly provisioned and released with minimal service provider interaction, has various advantages and offers exceptional opportunities to a business.  This technology is now finding wide implementation in South Africa in so far as it offers dynamic scalability and flexibility at a reduced cost…..

However, the legal implication of this technology is not perhaps as clearly defined as it could be and the following might provide some handy hints and tips on the matter……

In terms of managing the cloud computing infrastructure, from a legal point of few, certain best practices have been identified in the industry, these are:

  • Find a test case: Test the waters and set up a test case first, thereby minimizing the potential risk to the rest of your system/infrastructure,
  • Understand the cloud infrastructure and the risks: Enhance regular auditing and monitoring in your company,
  • Ownership of information is key: Ensure that you own your information and understand that how your data is going to be handled before the system is implemented,
  • Avoid cross-platform proliferation: Focus on one or perhaps two cloud service platforms at a time,
  • Understand the role and the lack of standards: Develop standard templates of contractual safeguards, data ownership and use limitations.

Customers such as banks, retail and telecommunications companies generally have a standard agreement developed to look after their position to reduce risks through a comprehensive set of terms and schedules.

Cloud vendors are, however, at the other end of the spectrum and the difference between the approaches of the service provider and customer are enormous. For example,  in Cloud vendor contracts, it is normal that warranties are given by the customer instead of by the service provider, and the service providers have a right to suspend your service whenever they choose to do so…this concept is almost unheard of in traditional outsourcing contracts and would certainly be questionable in view of the provisions of the Consumer Protection Act….. The CPA would certainly have a large role to play in these negotiations and should be borne in mind when reviewing the Cloud vendor contract……

To bridge this gap, before choosing a service provider, you should firstly analyze the available cloud service providers within the context of the market as a whole and try to derive the core themes and standard practices of each of these service providers……

It if further advised that you analyze the standard terms in your agreements with these service providers in order to identify any potential red herrings before hand as well as identifying those key factors you are prepared to discuss, negotiate, and agree on with the service provider.. …in this way you can filter down to the issues which need to be resolved a lot quicker and focus on those during your negotiations……

Advertisements

Actions

Information

One response

8 09 2011
Windows Azure and Cloud Computing Posts for 9/8/2011+ - Windows Azure Blog

[…] de Beer (@PatentKat) described the Legal implications of cloud computing from a South African vantage point in a 9/16/2011 post to her Softwarepatensa […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




%d bloggers like this: