Three weeks ago, I presented a business analysis document for a client who is considering moving all business operations to an Internet cloud.  I advised against it. This was before the megaupload.com seizure.  In the case of this business, moving to cloud servers  would greatly reduce the hardware costs associated with owning and maintaining physical servers, in essence, the costs are shifted to monthly costs, rather than one-time costs.  The chief advantage of a primary business using cloud architecture, is business processing and operations could be conducted from any location with suitable Internet access.  

At the time, I thought the primary disadvantage of basing all business functions in an Internet based cloud, for non-disaster recovery purposes, is connectivity.  Load balanced Internet access, provided by multiple vendors is recommended at the primary business site. Any interruption or significant congestion of the Internet connection would result in immediate downtime, or slowdown of hosted services.

With the seizure of megaupload.com, I believe the idea of moving to cloud services as primary business infrastructure has to be re-evaluated.  Connectivity is one issue and generally is resolved by the ISP(s) fairly quickly. Domain seizure by the US Government along with the physical servers, will result in an outage lasting weeks if not months. 

When you consider the cloud as primary business infrastructure, you may be saving upfront money, but you still bear the responsibility to be able to conduct business.  Blaming the cloud for your inability to conduct business is not an option.  With cloud service, you have no idea who your neighbours are and your eggs are in the same basket as many other business.  If one business, or user attracts the attention of the US Government, or powerful lobbyists that influence US Government activities, you have risk of losing access to your data for, potentially, a really long time.

The idea that a non-US based cloud service is somehow immune to the reach of the US Government, is an argument which is short-sighted.  As were about to find out with the megaupload.com trial, the US Government does not care about where your business lives.  They care if you do business in the United States.  The US Government believes that if you do business in the United States, you are subject to their laws, and they will enforce them, no matter where you are physically based.

Today, this megaupload.com case appears to be about the legality of file sharing media files. As law enforcement gains a better understanding of the cloud, and what may be hosted on cloud servers, I expect to see more seizures of hosting servers which contain content such as Child Exploitation, or Extremist Islamist  material.  In the cloud, your data does not know your neighbours data and that may put you at risk of a very long outage.

http://www.eweek.com/c/a/Security/FBI-Megupload-Shutdown-Cuts-Users-Off-From-Personl-Files-Business-Data-234883/?kc=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+RSS%2Feweeksecurity+%28eWEEK+Security%29&utm_content=Google+International