TIP group hosts Simon Hodgett for presentation on cloud computing

Simon began his presentation with a brief overview of the introduction of cloud computing. In the pre-internet age all information resided on a computer’s hard drive or on disks. But, with the advent of the internet, the fundamentals of computing changed. Now data residing in one physical location could be accessed from elsewhere. The technology bubble, and explosion in the availability of bandwidth that accompanied it, has allowed cloud computing to become ubiquitous.

Today there aren’t many individuals that pause to think about where their email messages, social networking information, and banking data actually reside. We tend to view the information on are screen without caring where it is coming from. However, we should be cautious about the risks associated with cloud computing.

Simon then discussed the appeal of cloud computing to organizations like hospitals and university’s. Cloud computing allows such organizations to function without building on-site data centres. Data centres are expensive to build and maintain and must be protected from things like fires and floods. In these cases outsourcing the data centre can provide cost savings and allow an organization to focus on its core competencies. These benefits come at the cost of control. Simon notes that it is extremely important that organizations and individuals are cognizant of trust we place in others as they handle our data. By using cloud computing services a certain amount of control is lost.

One of the main parts of Simon’s talk focused on something he calls the risk reliance spectrum. The idea of the spectrum is that applications we use are of varying importance. At the lower end of the spectrum we have applications that are conveniences or offer a small degree of business assistance. At the other end we find applications that are critical to one’s business or necessary for the integrity of health and financial systems. The more integral an internet application or service is to an individual or organization’s survival the higher degree of risk there is in entrusting the operation and maintenance of it to someone else.

Much of Simon’s work revolves around determining where his clients reside on the risk reliance spectrum and drafting appropriate contracts. His clients are both users and providers of services delivered through cloud computing. Simon stressed that it is crucial that lawyers advising clients understand the importance of applications and the business risk associated with them. For applications and services that fall at the lower bed of the risk reliance spectrum it may be appropriate that they have little or no warranties or other protections. These services are conveniences, often have many competitors and are often free. As Simon notes, if Google Maps isn’t working it may be an inconvenience but other services are available and users don’t have a choice other than to take these services “as is”. At the higher end of the risk reliance spectrum the contracting parties need to address things like performance warranties, security provisions, confidentiality agreements, auditing provisions, and more.

Simon’s presentation was a great reminder of the pervasiveness of cloud computing in today’s society. Cloud computing has become so ubiquitous that it is often taken for granted. However, the many opportunities and efficiencies made possible by cloud computing are not brought about without substantial risks for many individuals and organizations. Recognizing and addressing these risks appropriately can be the difference between failure and success.

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