Insight from the Cloud Legal Project
There is no shortage of hype about cloud services, both positive and negative, but it is often difficult for potential customers to do an objective cost / benefit analysis. In addition to promising productivity and business process benefits, cloud computing can be very attractive to cut rapidly both capital and operating expenditure.
There may, however, be unanticipated costs and risks in a move to online hosting of key data and applications. Perhaps surprisingly, and despite widespread concerns regarding security and privacy, there is little comparative information available regarding cloud contract terms and conditions and the associated legal risks of entrusting data to cloud providers.
A recent analysis of 31 cloud computing contracts from 27 different providers has at last shed light on industry practices and highlighted key issues for both suppliers and customers.
The survey formed part of the Cloud Legal Project at the Centre for Commercial Law
Studies, Queen Mary, University of London. Funded by a grant from Microsoft, but academically independent, this ongoing project is examining a range of legal and regulatory issues associated with cloud computing.
Most cloud contracts, whether for infrastructure, platform or software as a service, can be set up in minutes via an online sign-up process. Compare this to a conventional IT outsourcing, which is typically negotiated and subject to commercial and legal scrutiny.
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By: Christopher Millard