Legal approaches to management of the risk of cloud computing insolvencies

Cloud computing has revolutionised data handling in recent years in enabling the usage of computing resources, including for the storage of data, through flexible and on-demand services, often accessed through the internet. One potential consequential challenge which has only been briefly touched upon previously is the containment of the impact of an insolvency in this area, as access to data, as well as the means of processing this data, may be significantly delayed or even lost upon the failure of a cloud service provider. This is a matter of serious concern, as growing reliance on cloud computing technologies by businesses, including financial institutions, as well as public authorities presents risks of an insolvency having a potentially systemic nature. This article represents an initial attempt to identify possible approaches to the threat of cloud computing insolvencies, suggesting a double layered domestic approach in view of the significant risks for businesses and potential variations in scale and impact, as well as a need for supranational approach given the potential for a 'too big to fail' scenario. Lying at the intersection of insolvency law and technological innovation this is an area which is as yet almost entirely unexplored