Privacy and services in cloud is a hot topic now. With GDPR now adopted some are afraid that new privacy regulation in Europe will kill the cloud quickly. Although it is doubtful cloud services will cease to exist because of regulation nevertheless compliance with privacy and data protection regulation will leave an impact. Therefore it is no surprise two big law firms – Eversheds and Baker & Mckenzie – recently published their reports on cloud services.
Eversheds together with The Lawyer’s research services team globally surveyed 350 cloud customers, providers and advisors on cloud deals. They examined emerging trends in cloud computing adoption, contract negotiation and mergers and acquisitions.
As Eversheds finds out, the appetite for cloud continues to grow: almost 80 percent surveyed expect to increase cloud spending during the next 18 months. Still data security and compliance play important role in cloud deals. Private cloud is generally preferred over public one. Also, “report demonstrates that deals are in fact failing because of data privacy concerns, with both customers and suppliers choosing to walk away because of data-related concerns. Indeed amongst other notable statistics the top three reasons were data privacy and security related”.
Uncertainty about data location and fear of government access to data is main reason why cloud computing deals fail during negotiations. Second most common reason is concerns over inadequate breach reporting. And third reason is subcontracting – “insufficient visibility on whether elements of the service are subcontracted to third parties and who these third parties might be”.
Concerns over data protection usually comes up only at contract negotiation stage resulting in “wasted costs and resources as well as frustration”. That means companies should include those issues already in early stages of procurement.
Findings of Baker & McKenzie are similar: most buyers are concerned about security, privacy and/or regulatory compliance issues.
Download:
You can read more about privacy and cloud in Baker & McKenzie Cloud Magazine.
UPD.
European Commission carried out a web-based public consultation on data and cloud computing from 24 September 2015 to 6 January 2016. Its objective was to seek views and collect EU citizens’ and businesses’ needs and expectations on the European Cloud initiative and the forthcoming European Free Flow of Data initiative under the Digital Single Market Strategy. You can read synopsis report on the contributions to the public consultation (PDF).