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Cloud Computing and Tech City

By Patrick Clark
IT, Telecoms & Competition – Partner
Taylor Wessing 

Tech City is growing rapidly.  Three years ago it was home to 15 companies, now there are over 300.  One of the key questions facing them, especially startups, is how to manage their technology infrastructure.  For many, the natural solutions are cloud and mobile cloud computing.  These allow for agility and scalability according to changing business needs, while also reducing both the upfront capital expenditure on hardware and many of the maintenance costs associated with traditional IT infrastructure.  Resource pooling allows SMEs to take advantage of economies of scale, and to access greater service expertise from providers than they could achieve with in-house IT support.

Patrick Clark, Taylor Wessing

As with any commercial resource, cloud and mobile cloud computing come with their own risks and legal issues that must be managed.  Service availability may be a concern, as outages and data corruption can have a paralyzing effect on any business.  This can be mitigated in the terms of the service contract, but the power of SMEs in particular to negotiate standard terms and conditions may be limited.  Security and data protection risks are obvious impediments to widespread business acceptance of cloud solutions.  The risk of confidential data or IP being disclosed without authorisation can have a serious commercial impact, and breaches in data protection can leave businesses open to large fines. Finally the issue of exit also needs to be carefully considered – i.e. how do you transfer your data from the cloud of one provider to another. This may not prove to be as easy as you may first think.

While these concerns remain valid and should not be ignored, businesses in Tech City looking to take advantage of the opportunities presented by cloud and mobile cloud computing can protect themselves by conducting proper due diligence.  Due diligence on providers should take into account issues including their service availability record; assurances as to security and data protection; and key contractual provisions such as limitations of liability in the event of service problems.  The decision to move to the cloud and mobile cloud computing is not to be taken lightly, but with these safeguards in place they represent increasingly viable and valuable IT solutions for all kinds of businesses.

Patrick Clark
IT, Telecoms & Competition – Partner
DDI +44 20 7300 4923

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