These fine details about the risk of losing data, encryption standards, and who is liable in breach often depend on the negotiating skills of the CIO. Joy Butler, an attorney and book author, advises CIOs to negotiate the terms of a cloud storage contract thoroughly. The main goal: make sure the goals of the company are mirrored in the vendor agreement. For example, she says if the corporate policy is to staunchly control customer data, that should be reflected in the agreement with a cloud vendor.
"Once you sign a provider contract, you will have very few options for legally terminating a contract in which you had some or equal bargaining power. In contrast, if bargaining power was clearly uneven and the vendor contract was presented as a take-it-or-leave-it proposition, you may be able to terminate the contract and re-claim your data by arguing that the vendor contract was unconscionable," she says.
Is Google Drive a Lawsuit Waiting to Happen?
Butler says she does not anticipate any major lawsuits over data ownership in the cloud mostly because, at the enterprise level, most of the contracts are detailed enough for the specific agreement. At the consumer level, the debate over terms of service for cloud storage might lead to a change in the wording, especially if consumer push back about particular words or phrasing.
That's essentially what is happening now with Google Drive. A few experts have argued that Google does have the right to use data for their own advertising--not in a TV commercial, but for their AdWords program. Enterprise cloud providers say this is one major difference between enterprise hosting and consumer-level hosting. Praerit Garg, the co-founder and president at Symform, a cloud storage vendor, says most providers will have a clause about managing the data, which typically means protecting the data but not viewing or analyzing it.
Yet, with Google Drive, he says there may be different motivations for analyzing the data.
"A company that is able to generate revenues through targeted advertising using the information it stores will be much more motivated to view, analyze and reuse the information than the company that simply offers a subscription-based service for managing and protecting the data," he says.
In the end, Google Drive is a good reminder about studying vendor agreements and terms of service, negotiating terms that match existing corporate policies, and deciding which data is appropriate for the cloud and which data should never leave the servers in your own data center.
John Brandon is a former IT manager at a Fortune 100 company who now writes about technology.