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1 What Every User Needs To Know Before Moving To The Cloud LawyerDoneDeal Corp.

2 What Every User Needs To Know Before Moving To The Cloud 1 What is meant by Cloud Computing, or Going To The Cloud? A model for enabling convenient, on demand, network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services), that can be rapidly provisioned and released with minimal management effort or service provider interaction. 2 Key Characteristics 1. Cloud computing is an On Demand service. Classifying a service as on demand means that the user can unilaterally provision computing capabilities automatically without the need for any human interaction with each service s provider. So, through the user interface the user may be able to order additional network storage space or possibly schedule server time. 2. Broad network access. Whether the user is accessing infrastructure, platforms or software, all are available over the network and accessed through standard mechanisms that promote use by various types of thin or thick client platforms (e.g. mobile phones, laptops and PDAs). 3. Resource pooling. The cloud provider uses a multi-tenant model to pool computing resources. These resources, both physical and virtual, are dynamically assigned and reassigned according to consumer demand. In addition, the resources may be varied by type of equipment and may be located in any number of disparate jurisdictions. 4. Rapid elasticity or scalability. In a cloud computing model, the computing resources can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out or scale in as required by user demand. 5. Measured Service. Cloud systems have the ability to measure the service and therefore control and optimize resource use (e.g. storage, processing, bandwidth, and active user accounts). This monitoring and control ability provides transparency for both the provider and consumer of the utilized service. Service Models 1 The author acknowledges that this paper relies heavily upon a paper prepared by Bernice Karn, Partner, Cassels, Brock & Blackwell LLP, Data Security The Case Against Cloud Computing, dated March 31, Peter Mell &Tim Grance. Effectively and Securely Using the Cloud Computing Paradigm (presentation delivered at the National Institute of Standards and Technology, 7 October 2009), online:nist 2

3 Infrastructure-as-a-Service (IaaS), for example Amazon (http://aws.amazon.com/ec2/), provides virtual server instance API to start, stop, access and configure virtual servers and storage. In the enterprise, cloud computing allows a company to pay for only as much capacity as is needed and to bring more online as soon as required, on fairly short notice. Platform-as-a-Service (PaaS) in the cloud model is defined as a set of software and product development tools hosted on the provider s infrastructure. Developers create applications on the provider s platform, over the Internet. PaaS providers may use APIs, website portals or gateway software installed on the customer s computer. Google Apps (http://code.google.com/appengine/docs/whatisgoogleappengine.html) is an example of PaaS. Software-as-a-Service (SaaS) in the cloud model means that the vendor supplies the hardware infrastructure, as well as the software product. The user accesses the functionality of the software through a front-end portal. Because the service provider hosts both the application and the data, the end user is free to use the service from anywhere. Deployment models A cloud can be private or public, or a hybrid of the two. A public cloud sells services to anyone on the Internet. A private cloud is a proprietary network or a data centre that supplies hosted services to a limited number of customers. When a service provider uses public cloud resources to create its private cloud, the result is called a virtual private cloud. With the proliferation of cloud computing (both private and public) and the fact that IT departments must also deliver services via traditional, in-house methods, the newest catch-phrase has become hybrid cloud computing. A hybrid storage cloud uses a combination of public and private storage clouds. Hybrid cloud is also called hybrid delivery by major vendors (including HP, IBM, Oracle, VMware and Fujitsu), who offer technology to manage the complexity of performance, security and privacy concerns that result from the mixed delivery methods of IT services. Whether private, public or hybrid, the goal of cloud computing is to provide easy, scalable and secure access to computing resources and IT services. Benefits Cloud providers use built-in backups and safeguards that are not found in many desktop and enterprise servers: 3

4 In a cloud application, security upgrades and patches can be deployed immediately to all users (unlike in a desktop model where installation depends on the user and, as a result, often does not happen); All users receive the same high level of security regardless of their size or industry; Most organizations operating systems in-house cannot match the technological expertise of a cloud provider; Because data are fragmented and dispersed throughout the cloud, the data are not readable by humans; Compliance analysis may be simplified, since the user has only one cloud system to deal with versus many in-house systems; The cloud provider is an uninterested third party, so it has no motivation to see the user s data; Disaster recovery and data storage are cheaper in the cloud due to volume; Security Risks in the Cloud It is commonly held that users face the following security issues when entrusting data to the cloud: 1. Privileged user access who at the cloud provider has access to the data? 2. Regulatory compliance will the cloud provider be prepared to allow external audits for regulatory purposes? 3. Data location where are the data? In the cloud, data could be stored in any or many jurisdictions. 4. Data segregation what does the cloud provider do to ensure that each user s data remain segregated from the data of others? 5. Data recovery if the cloud provider experiences a disaster, what happens to the user s data? 6. Investigative support how can a user respond to e-discovery requirements and other investigations into its records? 7. Long term viability how can the user protect itself in the event that the cloud provider goes out of business, or is acquired by another company? Appropriate Selection: 4

5 Selecting the appropriate cloud option is based on a number of parameters, the top two of which are nature and volume of data. Depending upon the nature of data (such as restricted, unrestricted, confidential, etc.) and the corporate policies applicable to these classifications, one would decide whether data can traverse within or outside the enterprise. Volume of data is directly associated with network security and costs of transferring data to and from the cloud. Other Issues: Compliance: there are numerous regulations pertaining to the storage and use of data. Many of these regulations require regular reporting and audit trails. Cloud providers must enable their customers to comply appropriately with these regulations. Specific stakeholders who must be considered include AMF (Autorité des marchés financiers), OSFI (Office of the Superintendent of Financial Institutions), FSCO (Financial Services Commission of Ontario) and LSUC (Law Society of Upper Canada) and the various entities that report to each of them. Key areas of contention include: location of servers/data and ownership of data. In order to obtain compliance with regulations, users may have to adopt hybrid deployment models that are typically more expensive and that may offer restricted benefits. There is a need to have any cloud proposal vetted by legal/industry experts, to ensure that compliance issues have been addressed. Open Standards: most cloud providers expose APIs that are typically welldocumented, but also unique to their implementation and thus not interoperable. Availability and Performance: businesses are also worried about acceptable levels of availability and performance of applications hosted in the cloud. Technologies such as ADN (Application Delivery Network), CDN (Content Delivery Network) and TCP acceleration are commonly leveraged to mitigate these issues at the transport layer level. Data Transport/Bandwidth Cost: since data that was, in the past, stored locally on a user s office or home computer or networked local server would now be stored remotely in a data centre, an individual s internet usage might increase significantly as large files are sent via the Internet between the user s computer and the data centre. For example, a purchased movie needs to be downloaded only once if stored on a user s computer. But if the same movie is stored in cloud storage, it would, in essence, have to be downloaded every time it is viewed in its entirety. The same is true with Word files, if the user configures Word to save a duplicate image in the local machine for backup purposes. Well-Defined Exit Strategy: in the event that one needs to repatriate systems from the cloud. Legal and Contractual Issues: aside from the security, privacy and compliance issues enumerated above, cloud providers and their customers will have to 5

6 negotiate terms around liability (for example, stipulating how incidents involving data loss or compromise will be resolved), intellectual property and end-ofservice (when data and applications are ultimately returned to the customer). Typically, service providers severely limit their liability for data breaches and, especially, outages by providing service level fee credits in place of monetary damages, in the legal contracting sense. Patriot Act Concerns: in a cloud model where, because of the networked environment, data could be stored in many jurisdictions around the world, it s not just the Patriot Act in the U.S. that users must be concerned about; users face the possibility that the laws of the land of the countries in which data are stored could enable local governments or other third parties to obtain access to the data, in spite of what the contract between the user and the cloud provider states. Conclusion: The cloud is particularly compelling for sole practitioners and small firms. Smaller organizations benefit from the expertise of cloud providers. There are many possibilities for high-powered computing resources, continuous software updates/upgrades and application scalability, at a low cost. However, it is necessary for users to conduct their due diligence when selecting a provider which often involves investigating the provider s operations, security processes and contractual commitments. Identifying an established organization with a solid track record of service, security, stability and responsiveness can be essential to selecting a cloud provider for optimal outcomes. 6

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