Cloud Computing which entered our lives in the beginning of
2000s through online platforms like MSN and gmail, has marked an
era in technology and set a new course for software industry. In
particular, IT departments of companies are watching Cloud
Computing and its innovations with great interest.
Companies with subsidiaries, different branches and several
offices reduce their hardware and software costs and have agile
technology structure via cloud services. Enterprises which purchase
user based cloud services instead of separate software licenses for
each installation/hardware, are said to reduce their long-term
technology investment costs.
It is hard to say that Cloud Computing, influencing both
entities and real persons technologically, has the same impact in
Turkish legal area. Currently, there is no security standard for
cloud services, no regulation for data protection rules or
exemplary court decisions. Cloud agreements, which do not fall in
standard agreement types defined in Turkish Code of Obligations and
actually consist of different elements like service/software
license, should be interpreted correctly in terms of applicable
legislation including Law on Intellectual and Artistic Works and
shall cover protection clauses for companies. Otherwise, companies
who would like to follow the innovative path in technology might
fail in meeting their saving expectations and even face material
damages. We should note here that law chases technology and usually
falls behind in making required regulations for the new products
Data Protection and Safety, is of
vital importance for companies both in terms of their trade
secrets, customers lists and personal data of their personnel. It
is important to correctly evaluate where the data will be stored
(software company or hosting company), who will have access to
data, how it will be processed and what liabilities parties will
have in relation to data.
Pricing models should also be chosen
carefully, especially in terms of growing companies. If not, cost
of cloud service may exceed the cost of traditional licensing
model. The material legal/commercial issues to consider should be:
proper analysis of company's growth plan, including different
pricing options in the agreement and in any case having an exit
clause to terminate the agreement in certain periods.
Service Level Agreements also referred to as
SLAs, are seen as non-negotiable clauses of software
companies but these clauses and their consequences should be
cautiously evaluated. Otherwise downtime periods/errors causing
service disruption might still be deemed as "service performed
in accordance with agreement" and companies may end up in a
position with no right to claim damages/losses.
Liability, Warranty, Flexibility to Switch to
another Cloud Serviceshould also be regulated in
accordance with the risks of the company but also the nature of
When companies decide for cloud computing evolution, it is
essential for their IT department and technology lawyers to
carefully evaluate whether the cloud service will meet the
technological needs and also provide required legal protection.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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