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Cloud computing carries security, legal concerns

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Cloud computing is progressing quickly beyond simple e-mail and backup solutions for personal use to more sophisticated software applications for businesses and government agencies. As more organizations examine cloud computing to address their needs, a common set of concerns arises.

Chief among these, of course, is security. Are you willing to put your company’s sensitive data out in the cloud for the bad guys of the cyberworld to see? Many still say no. The flip side of this, of course, is that while there have been several well-publicized hackings of major cloud computing vendors, their network is probably safer than yours.

In practice today, most organizations won’t trust their financial information to the cloud due to the concern over security. Many, however, don’t seem to hesitate to use the cloud for internal sales and marketing information. Another popular cloud computing application is corporate travel and expenses. So we are seeing baby steps being made toward entrusting the cloud for enterprise use.

Along with security, legal concerns are near the top of the list. Simply put, folks are concerned about liability associated with putting data out on the cloud, especially if that data gets compromised in any way. For example, many folks won’t think twice about using a personal financial management software tool like Quicken or Microsoft Money, which allows them to put their own personal financial data out on the Web. But these same folks won’t put their organization’s financial data out there. Why? In the former case, no one will sue them.

Another related legal twist occurs if an organization uses the cloud to manage its trade secrets. It is quite conceivable that the courts could determine that an organization that does this is not applying best practices in protecting such information.

Another major concern when enlisting a cloud computing vendor is your exit strategy. Let’s say you found a vendor, used their application and put a lot of data into it. Over time you find a better vendor or find that your current vendor just isn’t up to snuff. How do you get your data back? Will the vendor give it back to you in a nice, pretty format, like an XML file or an Excel spreadsheet? Or will it tell you to suck wind? Let’s face it, most vendors are going to try to make it hard for you to leave, and if they have all of your data with no recourse, you could be stuck in a bad spot. Make sure when enlisting a cloud vendor that the events that are to occur upon contract termination are to your liking.

Businesses and public-sector agencies should review each of these concerns when considering a cloud computing solution. In many cases such concerns may be marginalized. We fully expect these issues to be resolved as cloud computing continues to mature.

John Agsalud is an IT expert with more than 20 years of information technology experience in Hawaii and around the world. He can be reached at


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