De-risking the Cloud
The shift to the cloud continues. Gartner forecasts that companies will spend $154 billion on public cloud services in 2014, up from $95 billion in 2009.1 Most likely, your clients are already using cloud services, such as online CRM (computing customer relationship management) applications or online data storage. On-demand, distributed computing is usually a few clicks (or taps) away. Substantively, cloud services agreements (CSAs) and the underlying services raise issues, such as in data protection and security and intellectual property, which require rigorous analysis. In addition, CSAs usually contain a litany of indemnities, which typically favor the cloud services provider (CSP) and result in protracted (and highly contentious) negotiations. This article will explore these provisions (and their respective rationales) and suggest a framework for managing risk in CSAs.
THE INDEMNITY LANDSCAPE