|By Jason Bloomberg||
|July 6, 2011 08:15 AM EDT||
If you don’t realize by now that Cloud Computing has its risks, then, well, you must have your head in the clouds. But then again, without risk there is no reward. When you place a bet on the Cloud, you know you’re betting on an emerging set of capabilities. And in any case, there are risks everywhere in business. Why should the Cloud be any different?
Even if you are willing to take on the risks of the Cloud, you must still do whatever you can to mitigate those risks. And unfortunately, risk means liability, and that means lawyers. To help make sure you and your lawyer are up to speed on all the legal ramifications of Cloud Computing, we’ve assembled the following list of concerns. Ignore the items on this list at your own peril.
Liabilities related to the geographic location of your data in the cloud
Legal jurisdiction – Where your Cloud provider is physically located may impact the legal jurisdiction that applies to your contract with the provider. How will you know which laws apply to your data if you don’t know what country or state your data currently reside in?
Regulatory Compliance – There may be regulatory constraints that limit where you locate your data. There’s no guarantee your Cloud provider will locate your data in your country—unless, of course, you pay them for that guarantee.
Disputes – If you need to arbitrate with or sue your provider, where do you do that? The business location of the provider may not be the same as the physical location of the data, complicating this issue.
Moving data across borders – The European Union is very particular about this rule. You can be held liable for moving customer information across borders without their permission.
Third-party access to your data
Search warrants – If a law enforcement agency has a search warrant for the server or hard drive that hosts your data, then they can remove the hardware from the provider’s data center and put it into evidence. For a long time. If you’re up to do good that’s one thing, but they may be going after suspected criminal activity for another one of the provider’s customers that happens to share space with you on the same physical server or drive.
PATRIOT Act seizures – if the FBI or other US federal agency suspects terrorist activity, they don’t even need a search warrant. They’ll simply walk into the provider’s data center and take whatever equipment they want. Think you’ll see your data again? Not likely. Does this sort of thing only happen in the US? I wouldn’t count on it.
eDiscovery/subpoenas – Even if no one suspects criminal activity, if you or someone else on the same server is party to a lawsuit, the opposing counsel can subpoena the data on the server. And just as with a search warrant, it may be many months before they return the hardware to the provider. Another question for your provider: what is the nature of their response to a subpoena? Do they need to inform you when a subpoena affects your data? What are your responsibilities in the face of a subpoena? For example, it may be illegal for you to delete data, even if the subpoena doesn’t explicitly specify such a restriction.
Provider employee access – what access do employees of the Cloud provider have to your data or machine instances? They have some level of responsibility for administering your account, but does that mean they have access to your data?
Trade secret & attorney/client privilege protection – If you have privileged information in the Cloud, either trade secrets or attorney communications, then making that information available to a third party can remove the privilege—even if the third party in question is just an admin at the provider backing up a server.
Liability of rogue employee – Employees of your Cloud provider aren’t the only risk. What if one of your own employees uses your Cloud account for illegal purposes? How much liability does your company have, and how do you mitigate such risks?
Responsibility and how to allocate it
Insurance in case of disaster – Do you have the proper insurance? What sort of disasters would be covered under your provider’s insurance, and which ones to you need to insure against yourself?
Liability for breach of privacy – Somehow your confidential data are leaked to the Internet. Under what circumstances is your provider liable for such a breach?
Liability for commingling with illegal data – sharing hardware with criminals and other unsavory types can lead to those pesky search warrants and subpoenas, but you should also understand your liability for having your data in close proximity to illegal data. Innocence may be no excuse when the feds find child pornography on the same server as your machine instances.
Liability for hacking – Hackers compromise your data or your machine instances. The weakness they targeted may have been your provider’s fault, but then again, maybe your own people misconfigured your machine instances, allowing the bad guys in. How do you determine the liability? What if the hackers installed a botnet in your machine instance that they used to penetrate the security of another company, who now wants to sue. Can they sue you?
Risk allocation – in those situations where perhaps you’re partly to blame for a disaster or a breach, how do you allocate the risk between your company and the Cloud provider? And will your insurance company pay a claim if you are partly to blame?
Logging and auditing requirements and risks
Supporting legal requirement for logging – Some regulations provide for specific logging and auditing requirements. For example, HIPAA requires you to maintain an audit log of everyone who accesses an electronic health record—even if it’s an admin at the Cloud provider. Make sure you communicate your specific logging and auditing requirements to your provider and include those requirements in your contract.
Privacy of logs – Sometimes the audit logs themselves contain confidential information. You must contract with your provider to properly encrypt that information, and you also need to mitigate the risk that such encryption is inadequate, allowing the logs to be compromised.
Other regulatory compliance issues
Regulations specific to your industry – The web of regulations is both extraordinarily complex and entirely arbitrary. It is your responsibility that you don’t run afoul of any regulations that pertain to storing, moving, or using data in the Cloud.
Risk of regulatory change – For the most part, today’s regulations that apply to the Cloud were around before the notion of Cloud Computing took off. Once regulators get a handle on the issues Cloud presents, however, you can expect new regulations to follow—and of course, it’s impossible to fully plan for them.
Requirement for provider audits and security certifications – You may also have regulatory priorities that require your Cloud provider to conduct its own internal audits or obtain security certifications. As regulations develop, expect such certifications to proliferate as well.
What if your Cloud provider declares bankruptcy?
Salvage rights to data – one day everything seems to be fine, but the next your provider is out of business, and they’re liquidating their assets. That means the servers that held your precious data are now on eBay, and they’ll soon belong to the highest bidder. To avoid this nightmare scenario, you’ll need to put in place some ironclad protections that will survive even a liquidation bankruptcy.
Escrow of provider data, code, and configurations – your own data aren’t the only things you might want to protect should your Cloud provider go belly up. Depending on how you’re using the Cloud, you may want to require your provider to escrow its own data, code, or configuration files, in the admittedly slender hope that if their servers go on the auction block, there’s some way to rebuild your Cloud application without starting from scratch.
The ZapThink Take
You probably picked up on the general assumption that this article is discussing Public Clouds in particular. That assumption is generally true, but it’s important to realize that Private Clouds have many of the same risks. You must still comply with regulations, deal with rogue employees, and potentially even respond to subpoenas or search warrants, after all. The list goes on.
Instead of focusing your efforts on insuring you’ve put together an ironclad agreement with a third-party Cloud provider, you must now serve as provider as well as customer if you’re building a Private Cloud. Yes, you have greater visibility and control, but you also have even greater responsibility and liability than if you are working with a Public Cloud provider. After all, having one throat to choke is no consolation when the only throat available is your own!
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Jun. 29, 2015 06:00 PM EDT Reads: 1,727
"We provide a web application framework for building really sophisticated web applications that run on a browser without any installation need so we get used for biotech, defense, and banking applications," noted Charles Kendrick, CTO and Chief Architect at Isomorphic Software, in this SYS-CON.tv interview at @DevOpsSummit (http://DevOpsSummit.SYS-CON.com), held June 9-11, 2015, at the Javits Center in New York
Jun. 29, 2015 04:16 PM EDT Reads: 553
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Jun. 29, 2015 03:34 PM EDT Reads: 528
The time is ripe for high speed resilient software defined storage solutions with unlimited scalability. ISS has been working with the leading open source projects and developed a commercial high performance solution that is able to grow forever without performance limitations. In his session at Cloud Expo, Alex Gorbachev, President of Intelligent Systems Services Inc., shared foundation principles of Ceph architecture, as well as the design to deliver this storage to traditional SAN storage co...
Jun. 29, 2015 03:30 PM EDT Reads: 1,788
Public Cloud IaaS started its life in the developer and startup communities and has grown rapidly to a $20B+ industry, but it still pales in comparison to how much is spent worldwide on IT: $3.6 trillion. In fact, there are 8.6 million data centers worldwide, the reality is many small and medium sized business have server closets and colocation footprints filled with servers and storage gear. While on-premise environment virtualization may have peaked at 75%, the Public Cloud has lagged in adop...
Jun. 29, 2015 03:00 PM EDT Reads: 2,219
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect t...
Jun. 29, 2015 01:19 PM EDT Reads: 764
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of pro...
Jun. 29, 2015 12:19 PM EDT Reads: 626
SYS-CON Events announced today that BMC will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BMC delivers software solutions that help IT transform digital enterprises for the ultimate competitive business advantage. BMC has worked with thousands of leading companies to create and deliver powerful IT management services. From mainframe to cloud to mobile, BMC pairs high-speed digital innovation with robust...
Jun. 29, 2015 12:15 PM EDT Reads: 2,530
Even as cloud and managed services grow increasingly central to business strategy and performance, challenges remain. The biggest sticking point for companies seeking to capitalize on the cloud is data security. Keeping data safe is an issue in any computing environment, and it has been a focus since the earliest days of the cloud revolution. Understandably so: a lot can go wrong when you allow valuable information to live outside the firewall. Recent revelations about government snooping, along...
Jun. 29, 2015 12:00 PM EDT Reads: 2,116
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
Jun. 29, 2015 11:00 AM EDT Reads: 2,247
Internet of Things is moving from being a hype to a reality. Experts estimate that internet connected cars will grow to 152 million, while over 100 million internet connected wireless light bulbs and lamps will be operational by 2020. These and many other intriguing statistics highlight the importance of Internet powered devices and how market penetration is going to multiply many times over in the next few years.
Jun. 29, 2015 11:00 AM EDT Reads: 1,854
There will be 150 billion connected devices by 2020. New digital businesses have already disrupted value chains across every industry. APIs are at the center of the digital business. You need to understand what assets you have that can be exposed digitally, what their digital value chain is, and how to create an effective business model around that value chain to compete in this economy. No enterprise can be complacent and not engage in the digital economy. Learn how to be the disruptor and not ...
Jun. 29, 2015 11:00 AM EDT Reads: 2,092
"We got started as search consultants. On the services side of the business we have help organizations save time and save money when they hit issues that everyone more or less hits when their data grows," noted Otis Gospodnetić, Founder of Sematext, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Jun. 29, 2015 10:46 AM EDT Reads: 535
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society-changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his session at @ThingsExpo, Jason Mondanaro, Director, Product Management at Metanga, discussed how you can plan to cooperate, partner, and form lasting all-star teams to change the world...
Jun. 29, 2015 10:00 AM EDT Reads: 2,010
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
Jun. 29, 2015 10:00 AM EDT Reads: 1,887
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
Jun. 29, 2015 10:00 AM EDT Reads: 1,968
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
Jun. 29, 2015 09:45 AM EDT Reads: 1,944
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will addresses this very serious issue o...
Jun. 29, 2015 09:45 AM EDT Reads: 2,396
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.
Jun. 29, 2015 09:20 AM EDT Reads: 594
In the midst of the widespread popularity and adoption of cloud computing, it seems like everything is being offered “as a Service” these days: Infrastructure? Check. Platform? You bet. Software? Absolutely. Toaster? It’s only a matter of time. With service providers positioning vastly differing offerings under a generic “cloud” umbrella, it’s all too easy to get confused about what’s actually being offered. In his session at 16th Cloud Expo, Kevin Hazard, Director of Digital Content for SoftL...
Jun. 29, 2015 09:00 AM EDT Reads: 1,932