Cloud Computing - Technology Savior or Privacy Nightmare?

Cloud computing and the concept of SaaS (Software as a Service) are some newish techno terms you may be hearing more of in the last few years. Even if you haven't heard these terms, odds are you may be actually participating in cloud computing. If you use an online email service (for example, Google Mail (gmail) or Yahoo), you are definitely flying in the cloud.

Wikipedia defines cloud computing as "a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet". That reads more or less like Greek to me, so I found a better definition from Dennis Kennedy in his blog post "Nine Legal Technology Trends for 2009 - The Year of Hunkering Down".

4. Get Your head into the Cloud. You will hear even more talk about “cloud computing” and “software as a service” (SaaS) in 2009. In simplest terms, I’m referring to ways both programs and data can be hosted and managed on the Internet through a third-party provider.

Are you using Google Apps or Docs? How about Microsoft Live or Zoho? These are all third-party service providers that hold your information on the Internet (the cloud) through their servers.

As Kennedy mentions in his short description of cloud computing and SaaS, these options provide several benefits (inexpensive, not needing to invest in expensive software and hardware, as well as technology expertise). However, there are also concerns, client privacy being one of the biggies.

One of today's articles from Law.com's Legal Technology addresses some of the legal issues surrounding cloud computing. "Cloud Computing Brings New Legal Challenges" by Shari Claire Lewis begins with a timeline of sorts describing the evolution of storing data, beginning with holding and controlling all data on-site and eventually growing into the option of lessening costs by outsourcing application usage and information storage to third-party providers. Lewis then moves right into the issues of data confidentiality, noting that "[a]s with other forms of "outsourcing," businesses' duties to protect private or confidential data do not end with their transfer of the data to third-party vendors for storage or processing." Lewis also points to other concerns in how cloud computing can effect pretrial discovery, especially electronic discovery. She concludes that:

As with many issues of technology, counsel will need to understand not just the legal precedent concerning cloud servers, but also the particular facts concerning their business' use of cloud servers, the type of data that is stored in the cloud, and the location and document retention practices of the service provider.