HPC in the Cloud: What to Do When Your Cloud Breaks

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January 17, 2012

What to Do When Your Cloud Breaks

Tiffany Trader

It's often said that the law lags behind technology. The more transformative the technology, the greater the lag. The Internet is an excellent example of this principle. For years, this virtual playground was virtually unregulated, and now it is the subject of a heated ownership battle. The legal challenges surrounding cloud computing, while significant, are not quite as complex. First, cloud evolved out of earlier technologies, such as time-sharing, grid computing and utility computing, which have had time to acquire legal standing. And second, the use of contracts, which specify the terms of service, provides judicial guidance and outline the risk on both sides. Nevertheless, there are some important legal considerations for both the provider and the customer, as addressed in an article on Law.com, "5 Key Considerations When Litigating Cloud Computing Disputes."

waves crashing As the author points out, cloud's increasing popularity will invariably lead to a rise in the number of disputes over services rendered, or not rendered as the case may be. Whenever data is lost or stolen, the customer will seek to be compensated, while the provider will seek to limit its liability.

The article presents five key areas of consideration. While the advice is geared toward legal professionals, it is also useful reading for anyone with a stake in the cloud. The key points are: Limitation of Liability, May the Limitation of Liability Clause Be Circumvented?, Analyze Contract Claims, Remedies, and Insurance And Indemnification.

Each of these headings is covered in the source article, so I'll just list a couple of the more salient points. Sometimes there is no completely satisfactory outcome, aka "remedy." Some contracts state that a provider may not let the customer out of the contract until services are paid-in-full, which the provider can use as leverage during a dispute. Also keep in mind the fact that lost data may be unrecoverable, a reminder to choose both your cloud strategy and cloud provider wisely since no solution is ever 100% safe.

While the article is written with a focus on litigation and what to do post data breach, it has just as much, if not more, value on the front-end, that is helping the would-be customer navigate the terms of service before they finalize the deal. An important question to ask is whether the contract can be negotiated. With the big cloud providers, like Amazon, contracts are highly-standardized, but smaller providers may be more flexible. Conversely, on the user end, larger companies will carry more weight at the negotiating table.

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