25th March 2011
There is a strikingly worrying gap between the legal framework around the supply of on-premises solutions and those offered in the Cloud. In the real world companies have offices, people on the ground and corporate structures that are transparent, for example, the records held at Companies House. Furthermore, with software resident on your own machines you have the potential means through normal contract remedies or employing subcontractors if necessary to restore operations in a relatively short time if something untoward happens. Contrast this with the virtual world of the Cloud and the legal framework is much more flaky. Very often, ownership is unclear, support is exclusively internet based and you have no access (at least in the short term) to programmes and possibly data as well. In effect a poorly managed Cloud-based operator can cease providing a service, even for a short period and quickly put you out of business – something that company law, or for that matter, consumer law fails to address. And as Lesley Meall, FSN contributing editor discovers this week, if you look at the contract terms virtually all of the risk sits with the purchaser.