Legal issues in the Cloud: What CIOs need to worry about

Legal issues in the Cloud: What CIOs need to worry about

How a lack of negotiation, offshoring of data and international law affect your contracts

The inability to negotiate terms of Cloud computing contracts, as well as the offshoring of data by vendors are two issues CIOs should be concerned about, a Sydney lawyer has said.

Speaking at the SecureSydney conference, Truman Hoyle Lawyers partner, Mark Vincent, presented his study of 25 standard Cloud contracts in a snapshot of the IT industry and found CIOs had no idea what their rights are, even after signing on the dotted line.

“Your contract often comes without someone to negotiate with,” Vincent said.

“There’s no-one at the end of the phone to talk to about a contract.”

As well as a lack of knowledge about Cloud contracts, Vincent said CIOs should be aware of the international laws that govern access to data stored in the Cloud.

“Generally, Australia’s jurisdiction stops on the border and for that reason ... there’s a limited ability for the Australian government to do anything about it,” he said.

“If you ask Microsoft where your data is going to be, they would probably say it could be in Singapore but they can’t really tell you where specifically it would be.”

Vincent said most foreign governments can gain access to information stored in data centres in their country.

“Most countries have permissions to access information that’s located in their country,” he said.

“If you’re using Cloud, one bit of nervousness arises in the Patriot Act, [which] by law the company [your Cloud provider] can’t tell their client that this data has been accessed.”

For more information on knowing your Cloud computing rights, check out CIOs guide on how to negotiate a better Cloud computing contract

Vincent also advised CIOs to survey Cloud contracts with a fine tooth comb.

“The survey of terms and conditions led me to conclude that vendors are promising no more than they have to and the contracts aren’t very mature yet,” he said.

“Customers are going to have to read the contract and buy the service, and I think the low cost as well as terms and conditions will lead SMEs (small and medium enterprises) to make the right decision with a long-term contract.”

Other aspects of the Cloud were discussed at the conference, including security, with two security experts having said that Cloud has the potential to be more secure than traditional computing as it evolves.

Follow Lisa Banks on Twitter: @CapricaStar

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Tags Cloudcloud computingNetworkingvirtualisationMark VincentTruman Hoyle Lawyers

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