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  5. What is the Cloud? And what is Cloud Storage?
20 Feb 2015

“The Cloud” is used to refer to an off site storage system that is through an internet connection. This mode of storage is becoming increasingly popular in todays online world. However, the recent events played out in the media involving personal photos of female celebrities from their “clouds” being leaked online has raised important questions about this enigmatic storage device. So, just how does it all work?

What is cloud storage?

Firstly, it is important to understand exactly what you are using. There is a common misconception, perhaps induced by the name “cloud”, that this storage service operates by keeping your data floating somewhere in cyber space. 

This is incorrect. Cloud storage is actually physical. Essentially, instead of storing the data on the computer you are using to create or record the information, you are storing it off-site on a third party’s “server”. The facilities that house these physical servers are called data centres. The third party is responsible for the data centres and must ensure that it is accessible and secure at all times. Although, it is important to note that the standards for these data centres are largely unregulated and the storage sites are commonly offshore. 

If you are a regular internet user, for work or recreation, chances are you are using “the cloud” already. Services such as Gmail, Hotmail, Yahoo mail, Youtube, Flickr, Facebook, Myspace and Google Docs all operate using the cloud system. 

What are the advantages of the cloud?

There are a number of advantages associated with using the cloud. Firstly, most people do not have the actual capacity to store their entire collection of electronic material themselves, this is especially so for businesses. This has been made easier with the availability of external hard-drives and thumb drives. However, people and businesses still gravitate towards using the cloud because of its online availability.

Secondly, it is user friendly. Services such as DropBox and iCloud make storing information as easy as logging onto a web page and pressing upload. Some even have a drag and drop tool and are preinstalled on your devices, such as an iPhone.

Thirdly, your information is central and accessible. You can access your information from any computer or device with an internet connection. This is incredibly convenient and it is easy to see why people prefer it to carrying around physical external hard-drives. Another point relevant to this is the ability to file share. For example, on DropBox you can share folders of documents or information to another persons account.

Fourthly, if the service you are using charges a fee, it is usually worked out on a consumption basis. So you are not paying for storage that you are not using. Consumers prefer this cost efficient method.

What are the disadvantages of the cloud?

The main and most important disadvantage for cloud storage is security. By storing information in multiple places it increases what is called the ‘attack surface area’. This means that your information is more susceptible to security breaches because there are more ways it can be accessed. For example, with computer, there is the physical server and there is also the connection between the two. All of which are susceptible to hacking. Most security measures which are necessary to mitigate this risk, such as encryption, are beyond the capabilities and time constraints of the average consumer. As a result, the consumer relies heavily on the third party to provide adequate security. As mentioned above, there is little regulation on this industry and exactly what third party cloud providers are required to do is unclear. 

Another issue is accountability. Often people know very little about the storage provider they are using. For example, many customers are not aware of where their information is stored and what policies are in place to protect it. To be safe, always read the terms and conditions of any cloud storage agreement you sign and make sure you are able to clearly identify where responsibility lies and how to resolve any issues. For example, the release of celebrity photos involved iCloud, a service provided by Apple. Apple has not and most likely will not be held liable for this breach.

Another consequence of there being minimal legality surrounding the use and operation of cloud services is an ambiguous concept of ownership. Ownership is sometimes identified by possession. So the question is: do you as the creator and user own the data or does the third party that actually physically holds the data have ownership? The answer is uncertain.

A further disadvantage is unreliability. There is no guarantee that the third party service provider will be online 24 hours a day infinitely. For example, if a data centre loses power you will not be able to access your data until they regain it. Another scenario where issues can arise is when a third party storing your data faces financial difficulty and goes bankrupt. What will happen to your data? How do you regain access? Or, what if the third party’s business is purchased by another company. Do they have the same policies in place? Who will notify you of this change of ownership?

It is clear that cloud storage services are the way of the future. However, you need to be aware that technology progresses at a faster pace than what the law can keep up with and by taking advantage of these new developments you may be exposing yourself to hidden risks. Always read the fine print.


This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or email us now.


*This is general information only, and does not constitute specific legal advice. Please consult one of our experienced Legal Team for specific advice relevant to your situation.

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