Cloud Computing: It's Time to Send In the Lawyers

You know a technology trend has reached a certain critical mass when the lawyers get involved. Cloud computing has reached that stage.

"My legal department has suddenly taken an interest in the cloud," said the CIO of a Midwest manufacturing company in a recent conversation. It's not hard to understand why. The cloud is basically a partnership, and the more an organization depends on a third party for anything, much less something as critical as IT services, with its implications for business and customer relationships, the greater the legal implications.

Forbes.com has an interesting blog about legal issues related to cloud computing, written by a cloud lawyer. Here are just a few areas where legal advice will be a benefit when entering into a cloud engagement:

** Performance. As I said in a previous blog, the upfront is all-important. Issues such as transaction rates and availability are business related, and as such covered in a service-level agreement; legal implications such as warranties and indemnities should be reviewed and commented on by the legal department.

** Continuity. The back-end is as important as the upfront, meaning you need to know what will happen when the cloud engagement ends, whether by design or not, amicably or not. Data access and recovery are particularly important.

(InformationWeek has an interesting and insightful report on the subject of cloud contracts and SLAs, available here [subscription required]).

** Intellectual property. Problems related to copyrights, trademarks, and patents (especially) are thorny and potentially expensive. The legal department should review all cloud computing engagements for any potential intellectual property conflicts or issues.

** Privacy. Modern day data issues, such as e-discovery, confidentiality, and data ownership are magnified in the cloud. Add to that the geographically dispersed nature of cloud computing, and privacy issues move center stage. It's critical to determine where data will reside and who will have access to it.You know a technology trend has reached a certain critical mass when the lawyers get involved. Cloud computing has reached that stage.