Not Every Cloud Brings Rain: Legal Risks on the Horizon

Not Every Cloud Brings Rain: Legal Risks on the Horizon

Sylvia Kierkegaard (International Association of IT Lawyers, Denmark)
DOI: 10.4018/978-1-4666-0197-0.ch011
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The promise of a utility-based IT service delivery model is well understood and highly desirable. Moving towards cloud-based computing is emerging and gaining acceptance as a solution to the tasks related to the processing of information. Cloud computing promises a single portal view to better manage email, archiving, and records retention. However while cloud computing certainly brings efficiencies, it is still immature and carries serious risks to business information. The questions around risk and compliance are still largely unknown and need to be ironed out. Cloud computing opens numerous legal, privacy, and security implications, such as copyright, data loss, destruction of data, identity theft, third-party contractual limitations, e-discovery, risk/insurance allocation, and jurisdictional issues. This chapter will provide an overview and discuss the associated legal risks inherent in cloud computing, in particular the international data transfer between the EU and non- EU states.
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Cloud Computing: Once Upon A Time

“Cloud” is a metaphor for the Internet. Thus, cloud computing is the usage of the Internet as a computing infrastructure and resource. The idea of computation being delivered in public space was proposed by computer scientist John MacCarthy who proposed the idea of computation being delivered in public space. In 2006, Eric Schmidt of Google described their approach to Software as Service (SaaS) as cloud computing at the Search Engine Strategies Conference. (Google Press Center, 2006) Amazon included the word “cloud” in EC2 (Elastic Compute Cloud) when it was launched a few weeks later.

Cloud Computing found its origin in the success of server virtualization and the possibilities to run IT more efficiently through server consolidation. Soon, visionaries came up with idea to bring virtualization to a next level by implementing some early storage and network virtualization techniques and thus making abstraction of the hardware in the entire data center. Add to this self-provisioning and auto scaling, and cloud computing was born. (Leyden, 2009) The most important contribution to cloud computing has been the emergence of “killer apps” that provided access to large bodies of map data. In 2009, as Web 2.0 hit its stride, Google and Microsoft, among others, formalized the Application Programming Interfaces (APIs). Mashups exploded and everyone sat up and took notice of the opportunities for innovation boot-strapped upon the shared capabilities of Google’s code and servers, and the underlying data licensed by Google. (Miller, 2008)

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