Timothy,

I think the cloud has a role for any company that deals with the public through the Internet. In fact, if you have a website, you are in the so-called "cloud." We, however, also have to live in the real world where attorneys and courts can deep six a company in nothing flat depending on how pathetic a picture they paint of the suffering of an alleged victim of corporate misdeeds.

The cloud could be used for non-sensitive information, but what information in a company qualifies for being non-sensitive information? Let's say that a customer sees something on a website that induces him to buy a product. Later, the product proves to be defective, and in the course of using it, the customer is injured seriously. He hires an attorney who requests production of a copy of the website page upon which the customer relied to make the purchase. You, the company representative have reviewed the copy of the page as it existed at the time of the customer's purchase, and you note that due to a mistaken sentence on the page, it could be understood why the customer went ahead with the purchase. On another page that existed at the time of the purchase more explanatory material detailed the hazards of using the product, but on the page in question, the wording would suggest to some that the company concealed a hazardous flaw.

From a legal strategy point of view, delaying the production of the web page in electronic format would be to your advantage and could spare your company millions of dollars in a court judgment, especially if your attorney is successful in obtaining a settlement before the case goes to trial. Unfortunately, the page is archived in a database located in the cloud, so opposing counsel simply subpoenas the digital version of the page from the hosting company, forcing your hand prematurely.

The cloud existed before it became fashionable to give it a name. In the 1980s, there were computer bulletin boards. In the 1990s, there was the seminal Internet. In the early part of this decade, there were application service providers (ASPs), and now this continuous presence has a name...the "cloud." It is not new, however. It is the same thing it has always been, namely an aggregation of service providers who offer to give companies and individuals the capacity to perform work with sophisticated software and tools at prices lower than those if they had to buy them outright. Insofar as the spectrum of services is concerned and the multiplicity of their uses, what we have now is certainly much better than what existed in 1980, but what is lacking is the common business sense that asks the question, "Is it wise to put certain kinds of information into the hands of people we cannot control directly, especially when we know that once the information is public, it cannot be retracted?"

That was why I said in my earlier post that an attorney should be involved in the inner group of persons in a company that determine how data is backed up and preserved. Minds that are engaged in other areas of business operations need to have a say in how data is used, where it is used, and how it is preserved. The IT world has always been a kind of glass ceiling world. Even within software companies, the people who are responsible for managing the servers that control workers' e-mail and house the databases used in the process of creating software never tend to rise into the inner circles of company management. The natural tendency of people is to reach for either money, power, or both. When money doesn't come easily, power is the next ring to reach for, so it is not at all surprising to see CTOs and CIOs build small fiefdoms out of their departments. Decisions are often made that do not necessarily comport with the objectives of general management, decisions such as putting the e-mail addresses of company personnel on websites, providing glowing testimonials about the educational background of the company president and his family and how the company is a family-owned business.

Now, let's suppose that information is put into the cloud, and an old rival of the president from his college days who has nursed a grudge against him since then happens to come across the information. He lays a trap for him and attempts to harm him physically, resulting in severe injury. The president's wife, after the shock of it all wears off, calls her attorney and sues the company for negligently exposing her husband and family to grave risks and emotional distress. $10 million later, the court case is over, the company is defunct, and the data is still in the public domain called the "cloud."

Good judgment is what spells the difference between a successful business leader and a flop. Good judgment is what is missing in most businesses, and when it is missing in a company with an active IT department, disaster is only a few short steps away.

So, yes, there is a place for the cloud, but it like a loaded revolver can either be an effective tool in warding off assailants or an instrument producing a self-inflicted wound. The difference between the two cases is the wisdom of the person that handles it.