Before you decide to sign up for cloud computing, there are issues relating to location of data, security and reliability, and data exit that you should be aware of.

'The cloud' relates to providing computing services such as computer power, data storage and applications over the internet. Businesses can usually buy these services from companies such as Microsoft, Salesforce, Google or Telstra.

There are, however, some issues to consider. A key question is where your data is stored or processed. The cloud may not be tied to any location, and the service provider may not know where your data is residing. The issues that arise here relate to your responsibility for data protection and privacy.

Before you consider moving to the cloud, you will need to perform proper due diligence. This should cover the parties in the cloud relationship, enforceability of the contract, and liability for breaches.

One remaining issue to be aware of relates to being locked in to certain applications or systems – and if you want to transfer data or applications, whether the data is portable between service providers. You need to be aware of this, particularly in relation to data retention laws and regulations. Depending on the situation, data needs to be accessible for five, seven or 10 years after creation.

If you are thinking of joining the cloud, you should have your solicitor look carefully through your cloud computing service contract and its terms and conditions of use.