Cloud Computing Impact on Contracts

Information Security Concerns About Cloud Computing

Loss of control of data, leading to a loss of security or lessened security
Loss of privacy of data, potentially because of aggregation with data from other cloud consumers
Dependency on a third party for critical infrastructure and data-handling processes
Potential security and technological defects in the cloud provider’s infrastructure
No control over the third parties that a cloud vendor might contract with
Loss of an entity’s own competence in managing IT infrastructure security

Contract law governs a cloud computing relationship
- Disputes over the terms of the contract could be costly to resolve
- could take too long to resolve
where data and infrastructure are physically located
- Local law might control how entities handle data
- Questions of who owns the data also could be influenced by the law of the state where data is located
- Location of the data could have an impact on how that data is provided in response to a public records request, subpoena, or court order
- different rules for how that data must be secured
- could affect how companies should respond to a breach of the systems used to store their data