Up In The Clouds


Still cloudy about the Cloud? Jillian Chia sheds some light on cloud computing


The winds of change have swept in the Cloud, the next new thing to take the technology industry by storm. “The Cloud” is a metaphor for the Internet and cloud computing generally refers to the use of the Internet to provide hardware and software as a service.

Cloud computing allows hardware and software to be provided as a service via the internet, whereby users can access infrastructure (such as servers), systems and applications using a web-browser. Cloud computing consists of various services, namely:

  • IT infrastructure (such as hardware, storage, network) being sold as a service on a usage basis (IaaS);
  • Application development platform sold as a service (PaaS); and
  • Software being sold as a service where software applications can be hosted in an external environment and accessed using the internet (SaaS).


Though cloud computing has become increasingly popular in recent years, it is not new to the world of technology. If you have used applications such as Facebook, MySpace or Gmail, you have used cloud computing. Search engines, such as Google and Yahoo! are forms of cloud applications. Similarly web hosted emails, such as Gmail or Yahoo! Mail, as well as social networking sites are also cloud applications as they can be accessed via the internet.


Every cloud has a silver lining

With the advent of cloud computing, users can now access infrastructure, hardware, software, applications and systems via the internet without the hassle of having to purchase physical infrastructure. Google, Amazon and IBM are a few of the companies which have embarked on projects to provide cloud computing on a large scale. Not wanting to be left behind, Apple launched its iCloud service at the Apple Worldwide Developers Conference on 6 June 2011.

Several factors have contributed to the popularity of cloud computing in recent times. The number of individual users who use mobile computing devices such as laptops, tablet computers and smartphones are increasing each day. This increases the need for a shared data centre that can be accessed anywhere. With the emergence of the Cloud, any device connected to the Internet is connected to the same pool of computing power, applications and files. Users can use the Cloud to store and access personal files such as photographs, mp3s, videos or even perform word processing on a server that is located remotely, thereby dispensing with the need for thumb drives and other external storage devices.

For businesses, cloud computing has opened up a whole new horizon of possibilities as it enables software and applications to be implemented more efficiently without the need to incur substantial sums of money on software and IT infrastructure.

Clearly the greatest benefit of cloud computing is that a user can access a computing solution regardless of his location as long as an internet connection is present. Further, software is also kept updated by the cloud service provider, reducing the need for businesses to hire in-house software support. The costs involved are also reduced as compared to the traditional licensing model whereby the applications are installed, operated and maintained on the premises.

Another reason to venture into the Cloud is the flexibility that comes with it. With cloud computing, software and hardware resources can be easily scaled up or down depending on the user's needs. As the user does not own the physical infrastructure (such as the servers) he only needs to pay for the resources that he uses.

For some businesses, cloud computing would be warmly welcomed as the burden of ownership, administration, and operation of the hardware and software is shifted to a third party provider, allowing businesses to focus on their core operations instead of having to deal with IT related problems.

The Cloud of Doubt

Despite its benefits, venturing into the Cloud is not without its problems, and the concept of cloud computing has given rise to a number of practical and legal concerns.


Security and Privacy

One of main reasons users are reluctant to use cloud computing is due to security and privacy concerns. Having your data and information in the hands of another entity is deemed to be risky and worrying to some if not most, especially businesses which deal with sensitive or confidential information. Many companies are reluctant to take advantage of the benefits of cloud computing due to the fear of data loss or damage. It is important for any company which decides to use cloud computing to be aware of the security and privacy standards and policies of the cloud service provider that it is signing up with. There must also be a right to audit and conduct regular checks on the cloud provider's policies and processes.



Privacy and data protection laws which vary from country to country is another area of concern. Data may be stored in jurisdictions unfamiliar to the customer and the laws in those jurisdictions may contain provisions which customers are less than comfortable with. For example, in certain jurisdictions, law enforcement agencies are permitted to have access to information without the knowledge or consent of the owner of the data.

Cloud computing may give rise to difficulties in determining where the data is stored and what laws and courts govern the use and processing of such data. It also begs the question as to how a cloud customer will deal with situations where the data protection laws in the customer’s home country conflict with the laws of the country where the data is stored. Customers may not always have control over these factors as laws in certain countries may prevail over the agreement between the parties.



Downtime and outages are common problems in computing. Cloud computing is not spared from such problems. A cloud computing customer must develop strategies and backup plans in the event of outages or downtime. It is therefore pertinent for a cloud computing customer to understand the disaster recovery and business continuity measures which are offered by its service provider and for the customer to have its own plan both with and without the assistance of its cloud provider.

Having a stable internet connection is also something which a customer of the Cloud needs to think about. An unstable internet connection in the customer’s premises may mean more downtime and outages which would negate the benefits of cloud computing.


Contractual Issues

As pricing of cloud computing is largely on a pay-per-use basis, companies also need to ensure that there are adequate means to verify the fees charged by the service provider. Having service level agreements in place are also essential to ensure that the customer is provided with a satisfactory level of accessibility to its computing solutions.


Intellectual Property

There has been some debate as to whether a customer who subscribes to the cloud services owns the data or whether the data belongs to the provider of the storage space. As such, any agreement with a cloud service provider should spell out clearly the ownership rights in the data and applications stored in the Cloud as well as the ownership in any developments that arise from the cloud computing arrangement.

Bringing in the Cloud

There is presently no specific legislation in Malaysia which governs the provision of cloud computing services. However certain licensing requirements may apply if the services fall within the licensing requirements under the Communications and Multimedia Act 1998:


(i) Network Facilities Provider (“NFP”) Licence for the provision of network facilities or physical infrastructure for or in connection with the provision of network services e.g. satellite earth stations, broadband fibre optic cables, telecommunications lines and exchanges, radio communications transmission equipment, mobile communication base stations and broadcasting transmission towers and equipment.

(ii)    Network Service Provider (“NSP”) Licence for the provision of network services for basic connectivity and bandwidth to support various applications e.g. bandwidth services, broadcasting distribution services, switching services, gateway services, access applications service, space services and cellular mobile services. 

(iii)   Applications Service Provider (“ASP”) Licence for services provided by means of, but not solely by means of, one or more network services. The ASP licence is generally for the provision of particular functions such as voice services, data services, content based services, electronic commerce and other transmission services. 

(iv) Content Applications Service Provider (“CASP”) Licence for the provision of application services which provide content, such as traditional broadcasting services and newer services such as online publishing and information services.


It is more likely that an ASP or CASP licence may be required, rather than a NFP or NSP licence. However this will largely depend on the type of services provided by the cloud service provider. Due to the wide range of services that may be offered under cloud computing, the licensing requirements may vary from service to service and service providers should exercise prudence by clearing any licensing requirements with the relevant authorities.

The Personal Data Protection Act 2010, which is pending enforcement, is also an important legislation for cloud service providers to note. Service providers should ensure that their customers have obtained adequate consent from the data subject (the individual to whom the data relates to) particularly in respect of the transfer of the data out of the country via the internet into the cloud computing solution.



Although cloud computing is still in its infancy, there is great potential in what it has to offer. It will undeniably be the future of outsourced data processing. The services cloud computing offers will change the way organizations and individuals deal with their information and transform the way companies look at their IT solutions.

The draw of cloud-based computing such as data accessibility and substantial cost savings clearly ensure that cloud computing is here to stay. However, as with all new technology, users must understand, and take measures to mitigate, the risks associated with it in order to reap the full benefit of the technology.


JILLIAN CHIA ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )



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