Some risks remain unaddressed with cloud computing

01/2/2013 | McKinsey Quarterly (free registration)

Cloud computing is an attractive option because of its agility and lower costs, but executives need to be aware of related compliance risks, James Kaplan, Chris Rezek and Kara Sprague write. Companies need to make sure sensitive data is protected and that regulations regarding where certain data can be stored and who can access it are met. Unfortunately, public-cloud providers cannot provide all of the necessary assurances. "How to draft the required terms and conditions will remain an open question until litigation has identified the critical issues and legal precedent has been established for resolving those issues," Kaplan, Rezek and Sprague write.

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