The Law and the “Cloud”

What is the Cloud? You may be familiar with the term, “the Cloud” from the various advertising campaigns on television. The “Cloud” is an off-premise server solution for your business’ email communication, data storage and program needs.

The “Cloud” allows a business to obtain sophisticated technology without the capital outlay and on-site expertise that often prohibits companies from utilizing the latest technology and expanding their IT abilities. It eliminates the need for server rooms, managing IT specialists, costly updating, contingency planning, and archiving. The “Cloud” permits a vendor to benefit from economies of scale and that benefits the vendor’s customers through cost savings and increased capabilities. Vendors are seeking customers to fill their “Cloud” capabilities and there is an opportunity for customers to negotiate a good deal now while this technology is new. A business will contract with a vendor to house its data center using the vendor’s updated servers. Typically you see businesses start out a contract with an email service that eliminates the need for exchange servers or for backup capabilities for e-discovery.

Why is the law important when using the “Cloud?” The technology offered by the “Cloud” is relatively new. How the “Cloud” works creates legal issues that a business must look at in order to protect itself and its own customers. These issues include ownership of the data, ownership of equipment, software and hardware needs, access to the data, security and backup capabilities. With an off site server these issues become more critical than those involving the onsite server solution you may be presently utilizing. Of course, there are also the issues that need to be addressed with any email, data and program solutions, such as downtime, system capabilities and system compatibility. It is imperative that you enter into an agreement with the vendor providing the “Cloud” that protects fully your business and its data.

Attorney Jennifer Chadwick can assist your company in negotiating, reviewing and/or writing an agreement that provides protection for your business when utilizing this new technology. Please contact her directly at 585-324-5721.