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Is the best place for data in your data center or in the cloud? Ask your lawyer

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Cloud-based storage is amazing. Simply amazing. That’s especially true when you are talking about data from end users that are accessing your applications via the public Internet.

If you store data in your local data center, you have the best control over it. You can place it close to your application servers. You can amortize it as a long-term asset. You can see it, touch it and secure it—or at least, have full control over security.

There are downsides, of course, to maintaining your own on-site data storage. You have to back it up. You have to plan for disasters. You have to anticipate future capacity requirements through budgeting and advance purchases. You have to pay for the data center itself, including real estate, electricity, heating, cooling, racks and other infrastructure. Operationally you have to pipe that data to and from your remote end users through your own connections to the Internet or to cloud application servers.

By contrast, cloud storage is very appealing. You pay only for what you use. You can hold service providers to service-level guarantees. You can pay the cloud provider to replicate the storage in various locations, so customers and end-users are closer to their data. You can pay for security, for backups, for disaster recovery provisions. And if you find that performance isn’t sufficient, you can migrate to another provider or order up a faster pipe. That’s a lot easier, cheaper and faster than ripping-and-replacing outdated storage racks in your own data center.

Gotta say, if I were setting up a new application for use by off-site users (whether customers or employees), I’d lean toward cloud storage. In most cases, the costs are comparable, and the operational convenience can’t be beat.

Plus, if you are at a startup, a monthly storage bill is easier to work with than a large initial outlay for on-site storage infrastructure.

Case closed? No, not exactly. On-site still has some tricks up its sleeve. If your application servers are on-site, local storage is faster to access. If your users are within your own building or campus, you can keep everything within your local area network.

There also may be legal advantages to maintaining and using onsite storage. For compliance purposes, you know exactly where the data is at all times. You can set up your own instruction detection systems and access logs, rather than relying upon the access controls offered by the cloud provider. (If your firm isn’t good at security, of course, you may want to trust the cloud provider over your own IT department.)

On that subject: Lawsuits. In her story, “Eek! Lawyers are Coming After Your Fitbit!,” Sharon Fisher writes about insurance attorneys issuing subpoenas against a client’s FitBit data to show that she wasn’t truly as injured as she claimed. The issue here isn’t only about wearables or healthcare. It’s also about access. “Will legal firms be able to subpoena your cloud provider if that’s where your fitness data is stored? How much are they going to fight to protect you?” Fisher asks.

Say a hostile attorney wants to subpoena some of your data. If the storage is in your own data center, the subpoena comes to your company, where your own legal staff can advise whether to respond by complying or fighting the subpoena.

Yet: If the data is stored in the cloud, attorneys or government officials could come after you, or try to get access by giving a subpoena to the cloud service provider. Of course, encryption might prevent the cloud provider from complying. Still, this is a new concern, especially given the broad subpoena powers granted to prosecutors, litigating attorneys and government agencies.

It’s something to talk to your corporate counsel about. Bring your legal eagles into the conversation.

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