Cloud computing is a hot trend that's creating opportunities

Cloud computing is the digital outsourcing of the future, even though its legal consequences have but to be completely tested. The issue is furthermore confused by the reality that cloud providers often depend on subcontractors to deliver extra server capacity. So a customer's sensitive information—credit cards, Social Security numbers and the like—could be residing nearly anywhere in digital space at any time.

Small businesses that rely on cloud-computing services need to draft contracts with providers that anyway you look at it spell out legal liabilities, as then as other issues, says James Kunick, a partner at Chicago law firm Much Shelist Denenberg Ament & Rubenstein P.C. “The risks are great. You are giving up control of your processing and data storage to somebody else.”

Bill Loumpouridis, president of EDL Consulting Inc., a cloud provider based in Deerfield, recalls that the old paradigm called for his customers to build big monolithic networks on their own premises. Now, he says, cloud providers “are telling customers, ‘Don't build it. Rent from us instead.' Companies have all kinds of choices and flexibility now. However that as well means more points of failure. You're trading one set of problems for others that you hope will be less onerous.”