Cloud computing sets stage for corporate legal battles

Dubai: Tighter budgets, less capital investment and fewer IT staff in the corporate world are expected to boost cloud computing storage demands past $1 billion per year in the Middle East in a third-party global storage market worth $68 billion annually.

In instances where a large corporation commissions a third-party firm to construct a cloud data centre on its behalf, Allen said there is more latitude for the company to protect itself with a relatively iron-clad business contract outlining the conditions of the build-to-operate relationship.

However, other flexible cloud computing services offered and hosted by cloud storage firms with servers in multiple countries may not have the same protection.

Allen said that "in a cloud computing context it is likely that [resolution conditions] will be decided by the provider and not the customer."

"It's likely we will have some high-profile cases that consider issues arising from cloud computing," Allen said. "It will take one high-profile problem to precipitate a legal battle."

In March of this year, innovation research firm Gartner Inc, warned companies to be careful when moving to cloud computing services.

Dr Joseph Reger, Chief Research Officer at Fujitsu Research Solutions, said cloud computing has suffered a hit following the latest WikiLeaks controversy surrounding the release of 500,000 confidential government cables around the home.

Big risk for the development of the IT market

"Amazon's reaction in particular presents a big risk for the development of the IT market. The provider simply cut off cloud services for WikiLeaks — in other words, its server capacity, which made WikiLeaks available on the internet. Amazon's reason: WikiLeaks violated its terms and conditions. This is bad news for the new IT paradigm of cloud computing.