Cloud Computing

Cloud computing offers a revolutionary new way to conduct business over the Internet. This service is a form of cyber-outsourcing where virtual servers provide certain services or applications for consumers online. Cloud computing vendors include, IBM SmartCloud, Cisco Cloud Computing, Amazon Elastic Compute Cloud (aka Amazon EC2), and various smaller vendors. These providers offer a range of services including storage services and spam filtering.

There are various forms of cloud computing available over the Internet. Managed Service Providers (“MSPs”) are the oldest form of cloud computing. A “managed service” is an application such as virus scanning for email or anti-spam services. The most common form of cloud computing is through Software as a Service (“SaaS”), which delivers an application to multiple customers through a browser using a multi-tenant architecture. Customers benefit because they do not have to invest in servers or purchase software licenses. Providers benefit because they are able to reduce costs because they only need maintain one application for their multiple customers. is a well-known example of SaaS cloud computing, but Google Cloud Storage is a fast growing option as well.

Similar to SaaS computing, some providers offer Application Programming Interfaces (“APIs”), which allow developers to offer certain functions over the Internet without having to offer entire applications. These functionalities range from specific business services to wider-ranging APIs, such as Google Maps. Another version of SaaS computing allows users to develop their own application and offer the application through a provider’s infrastructure over the Internet. The developers are limited by the provider’s capabilities, but the developers benefit from the established predictability. Google App Engine is an example of such cloud computing.

Commerce Service Providers (CSP) are a combination of SaaS and MSPs. This form of cloud computing offers a service community wherein users interact. This is most common in trading environments that allow users to order services from a platform, which arranges delivery and pricing within the consumers set specifications. Ariba is a common example of such cloud computing. Utility Computing is another form of cloud computing that provides storage and virtual servers on demand. Entities generally use this option for supplemental storage in addition to their primary datacenters.

The innovative nature of cloud computing has introduced novel legal implications. Senator Amy Klobuchar has proposed the Cloud Computing Act of 2012, which aims to “improve the enforcement of criminal and civil law with respect to cloud computing.” This law’s main purpose is to protect “cloud computing services” under the Computer Fraud and Abuse Act (“CFAA”), which is codified under Title 18 U.S.C. ยง 1030. The Cloud Computing Act suggests that each unauthorized access of a cloud computing account should count as a separate CFAA offense with a minimum of $500 in damages for each offense.

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