Cloud Computing Brings New Legal Challenges

In the early days of personal computing, users depended on "local" drives and stored their data on floppy disks kept in containers on desktops or in drawers. Applications from software manufacturers permitted users to create, manage and manipulate their business and personal information.

But in short order, software became more and more sophisticated and floppy disks were replaced by hard drives. Operating systems became faster, hard drives were developed with even more capacity and programs grew in size and scope.

Eventually the advent of networks allowed ever bigger programs to be shared among multiple users accessing ever-growing data banks. Nevertheless, networks remained largely tethered to the location of the users, who, at least theoretically, maintained both physical possession and control over the data.

The trend today is toward something different: Whereas companies may still prefer their employees to be in geographic proximity to urban centers of business and government, the cost of prime real estate, and the availability of fast online interconnectedness in many locations that would otherwise be considered remote, make cloud computing a viable and cost effective alternative.
Accordingly, data and data applications that are kept in a cloud may be physically located in one or more remote servers but are nevertheless transparently available to company users.[FOOTNOTE 1]

Data kept in a cloud often is, or may be, shared among, or usable by, multiple parties. It can include information ranging from word processing documents and business presentations to employee or patient health information and tax or accounting records, to schedules, calendars and contacts. The key to cloud computing is the speed with which the data and applications can be accessed, rather than the capacity and speed of a personal computer's hard drive, as was crucially important in the past.

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Source: law.com
By: Shari Claire Lewis