Clouding Your Thinking

Do you think legitimate customers of Megaupload ever imagined that Kim Dotcom would get raided by the NZ Police? Did they imagine that the very computers that stored their legitimate data alongside the alleged illegal data would get seized? The authorities don’t appear to have any sympathy or responsibility for delivering the legitimate data back to its owners.

Using the ‘cloud’ for data storage sounds leading edge but is it the right strategy for your business? Of course the term ‘cloud’ to most of us means ‘somewhere out there’. But the reality is your ‘cloud’ data is stored on servers that can be located anywhere in the world.

Running a business successfully involves arranging and controlling your resources in a productive manner that achieves your goals. Placing your data in the cloud may be highly beneficial to your business but the risks of handing over the controls to a cloud supplier should be considered:

  • What happens if your supplier gets bought out?
  • Do you have an exit strategy? – What technical problems will you have in migrating your data to an alternative system?
  • Will the benefits promised actually come to fruition?
  • How much power will your supplier hold? How easy will it be for them to drive up prices? Do they have enough competitors in the market to hold prices?
  • How secure is the data? Does it meet your security needs and those of your customers and other stakeholders? What commitments have you made to third parties to ensure the security of their data?
  • Can the supplier meet its contractual obligations? What if they don’t…what recourse do you have?
  • If a natural disaster or financial disaster hits the supplier, do you have a recovery plan?
  • What is the risk that the quality of service falls short of levels promised?
  • Are your personnel ready, willing and capable of migrating to the cloud?
  • What is the risk that some of your systems will not integrate with cloud systems?
  • Will your business require so much work in preparation for migrating to the cloud that it’s simply not worth it?
  • Will your data be stored alongside the Megaupload’s of this world?
  • What is the track record of your supplier?
  • Who owns the data?
  • Do you have enough technical knowledge to assess the risks?

Finally, on 9th December 2010 the IRD issued a Revenue Alert to remind New Zealand businesses that in the IRD’s view only business records stored in data centres physically located in New Zealand will comply with the record keeping obligations in the Inland Revenue Acts. I note that Xero Chief Executive Rod Drury appeared very confident of obtaining an exemption from the IRD for the Xero product but as far as I am aware, 18 months later, the exemption has not been granted

2017-11-23T14:14:09+00:00June 25th, 2012|Business Improvement|