Given the ever-increasing reliance on cloud computing, it is inevitable that disputes and litigation will increase between corporations and cloud service providers. The most obvious point of contention will occur if data in the cloud is lost, damaged, stolen or is otherwise rendered inaccessible for a period of time. In such circumstances, the corporation may be facing enormous liability and will seek to hold the cloud provider responsible, while the cloud provider will undoubtedly look to the parties’ agreement and the underlying circumstances for defenses. This article discusses five key considerations for litigators representing corporations and/or cloud providers to focus upon in litigating cloud computing disputes.

BACKGROUND

Cloud computing is the process by which a corporation uses remote computing providers connected via the Internet, rather than internal servers and network drives, to store and access the corporation’s electronically stored information. Cloud computing essentially consists of large blocks of server space that are owned and managed by cloud providers, which corporations essentially “rent” on an as-needed basis.

Renting cloud space has become increasingly popular in recent years because it saves corporations the cost of building and maintaining their own data centers, and allows them to ramp up or down the amount of server space on an as-needed basis. For example, cloud computing allows retail companies to have access to more server space during the holiday season without paying for that space as it goes unused during the slower summer season. Cloud providers also provide software maintenance and updates, which allows corporations to reduce expenditures on software and information technology staff.

LITIGATION LIKELY TO INCREASE

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