Brian Bowman – On the Cutting Edge

Have you heard the term “cloud computing“, but aren’t really clear what it means?

Cloud computing is an umbrella term that refers to the use of Internet-hosted computer services. Think of your server — instead of having one in-house server located on company premises, an organization might opt to buy space on a third-party provider’s server. Other options include software hosting and data storage. By purchasing computing services from a variety of Internet-based providers, your computer needs are housed within a larger “cloud” of computer services.

Some organizations are opting for ”Software as a service” (SaaS), and allowing their data to reside on other company’s servers, or “the cloud“. Users only have to buy the space they need, which allows organizations to save money on their technology costs. Other benefits include access to people with technological know-how, flexibility and reduced maintenance costs.

Cloud computing is not new, but is now embedded into the fabric of modern business operations.  In fact, the Los Angeles Times has reported that the city of Los Angeles is considering using Google applications for all of its software needs. 

Privacy issues related to cloud computing, however, are profound. For example, many of the security questions that relate to traditional third-party data hosting were raised when a hacker broke into a Twitter employee’s work e-mail account and stole confidential company documents. The World Privacy Forum, meanwhile, has released a 28-page report on some of the privacy issues that relate to cloud computing. The report concludes that sharing information may expose some business users to liability, and emphasizes the importance of checking a cloud provider’s terms of service, privacy policy, and location.

Canadian businesses that engage in cloud computing should be reminded that they must do so in compliance with applicable privacy laws. For example, the Personal Information and Protection of Electronic Documents Act obliges organizations that transfer personal information to third parties to ensure appropriate security safeguards are in place.

They should also be mindful of the raging debate about the perils of cloud computing that has been underway now for some time. While cloud computing has the potential to provide benefits, organizations should ask themselves whether it is worth the risks it poses. You might save money in the short run, but is it worth the potential of a massive privacy breach?