In-House Counsel Day Priorities for Cloud Computing the benefits, potential risks and security for the future

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1 In-Huse Cunsel Day Pririties fr 2012 Clud Cmputing the benefits, ptential risks and security fr the future Presented by David Richardsn Thursday 1 March 2012 WIN: What in-huse lawyers need Knwledge, supprt and netwrking fr the in-huse lawyer cmmunity Clud cmputing is n the agenda A recent glbal CIO survey by Gartner fund, fr the first time, that virtualisatin and clud cmputing were the tp 2 technlgy pririties fr CIOs Gartner predicts that the clud cmputing market will be wrth US$150 billin by

2 What is Clud cmputing? Outsurcing IT services via the Internet - frm delivering basic ffice applicatins t individuals/ small businesses at ne end f the spectrum t majr bespke cmbined service fferings t large crprates & Gvernment at the ther All mdels invlve infrmatin technlgy services which are: delivered via the Internet de-centralised IT infrastructure truly elastic/scalable n-demand Why all the buzz? The benefits f the Clud Substantial upfrnt and nging cst savings: csts reductins due t sharing f infrastructures and payas-yu-g mdel Flexibility/ Scalability: users are nt limited by their hardware r IT resurces Time t market: adptin f new types f services can be almst immediate 2

3 Key legal risks Overview Privacy/data wnership and prtectin persnal infrmatin business sensitive infrmatin cnfidential infrmatin Security Regulatry Practical Key risks - Privacy There is a perceptin that the clud is inherently less secure than traditinal IT mdels f data stred n hardware lcated at the premises f the custmer r a specific data centre 3

4 Key risks Privacy (cnt) Lss f physical cntrl ver data Data is ften stred in the mst cst effective lcatin(s), which may: be ffshre; and nt have privacy prtectins cmparable t thse f Australia Cmpliance with the Privacy Act 1988 (Cth) and the 10 Natinal Privacy Principles (NPPs) in relatin t persnal infrmatin Prtectin f cmpany data (and business sensitive infrmatin) Privacy - Hlding the data internatinally Imprtant t understand the implicatins f hlding data internatinally NPP 9 (Transbrder Data Flws) regulates the transfer by an rganisatin f persnal infrmatin abut an individual t a different entity in an ffshre lcatin The laws f the ffshre lcatin where the data is held may als apply t the data e.g US Patrit Act 4

5 Addressing the privacy risks Investigate and understand the mechanisms and prtectins yur supplier will use t prtect yur infrmatin Ensure that yur clud services cntract: cntains apprpriate bligatins n the supplier t safeguard all persnal infrmatin and relevant indemnities clearly defines wh hlds the rights t the data being held in the clud places bligatins n yur supplier t nly stre yur data in nminated cuntries which yu believe have privacy prtectins cmparable with Australian privacy law Privacy - Prving cmpliance Ensure that yur clud service cntract gives yu access and audit rights t verify cmpliance with prmised security mechanisms Have yur custmers infrmed f and cnsent t their data (ie persnal infrmatin) being prcessed and/r stred in the clud 5

6 Privacy Future Develpments Prpsed refrms Offshre transfer f persnal infrmatin Transferee t remain liable Guidance t be prepared by Privacy Cmmissiner Key risks - Security Less cntrl ver IT infrastructure Reliance n clud prvider t ensure that the infrmatin is kept secure 6

7 Addressing the security risks Ensure that: all required security arrangements are reflected in the clud services cntract yu have access and audit rights t verify cmpliance Addressing the security risks (cnt) Cnsider alternate frms f clud cmputing such as 'private cluds' and 'shared private cluds' (in cntrast with the mre cmmn 'public clud') which mdels may: Deliver many f the benefits f clud cmputing Keep IT infrastructure within the custmer's physical r virtual cntrl r within a specified gegraphical bundary Present fewer (r mre acceptable) risks than a public clud mdel 7

8 Key risks - Regulatry Certain regulated entities, such as APRA regulated entities and AFS licensees, have additinal IT security and peratinal requirements Of particular relevance t clud cmputing is PPG 234 Management f security risk in infrmatin and infrmatin technlgy which prvides high level guidance fr regulated entities as t hw they shuld address the issues f IT security Addressing the regulatry risks PPG234 recmmends that disaster recvery arrangements shuld seek t ensure that an Australian regulated entity maintains cntrl ver assets that relate t the Australian peratins thrugh: Dcumentatin identifying the relevant assets Sufficient segregatin t allw separatin f assets if required Cntractual prtectin t ensure access t assets A regulated entity shuld ensure that using a particular clud cmputing services mdel will meet its bligatins 8

9 Key risks - Practical Perfrmance bligatins and service levels Interperability Disaster recvery Using yur existing sftware in the clud (licence fees) Addressing the practical risks Same IT cntract principles apply: cntract shuld describe the supplier s perfrmance bligatins and set ut mechanism t ensure perfrmance Nte exclusins f liability due t internet unavailability 9

10 Addressing the practical risks (cnt) Cnfirm interperability: will yur retained IT and cmmunicatins infrastructure be apprpriate t cnnect t the supplier s clud? Cntractual disaster recvery and business cntinuity prcesses and infrastructure: Help ensure service cntinuity and prtect against data lss Traditinal frms f disaster recvery are nt always pssible r apprpriate - ask supplier t explain their prcesses and infrastructure Ensure yur cntract places apprpriate bligatins n the supplier Sftware use and license fees fr use in the clud Where t frm here? Befre yu jump int the Clud D yur hmewrk! Take time t investigate and understand: The types (eg persnal / sensitive / cnfidential) and sensitivity f the data t be put int the clud Yur bligatins (eg cntractual, privacy, regulatry, business cnfidentiality) with respect t the data D the terms f yur existing sftware licences permit mving yur sftware int the clud? Any cnsequence n the licence fees? 10

11 Where t frm here? Befre yu jump int the Clud (cnt) Where is yur supplier s infrastructure and data centre based and where (i.e. in which cuntry) will yur data be stred? Will yur data be subject t ptential access by freign gvernments (under laws such as the US Patrit Act)? What security prtectins will the supplier use t prtect yur data? Reputatin/track recrd f yur supplier hw reliable are they? Questins? 11

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