“Cloud computing” refers to the revolution sweeping through corporate information technology departments of using remote computing providers connected via the internet, rather than internal servers and network drives, to store and access a corporation’s electronically stored information. The cost savings and efficiency gains offered by cloud computing make it an irresistible lure to companies looking for cheap data storage and technical support.
However, cloud computing also poses a serious threat to an organization’s ability to prepare for and respond to document preservation and discovery obligations, and erodes protections against discovery of the data by government authorities and third parties. When the negotiation of a terms-of-service agreement with a cloud service provider takes place without the input of legal departments or outside counsel who are familiar with these issues, corporations and their counsel lose a valuable opportunity to include favorable provisions that could help mitigate substantial e-discovery risks and costs in the future.
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