E-discovery is a constantly developing topic in the legal world, and the word, “world,” should be taken literally.  Across the globe, different nations and their legal system are formulating new rules to tackle new discovery issues that can arise almost as quickly as new technology and means of communication can develop.  The only problem with this, however, is that different nations are addressing their e-discovery issues with different solutions.  This problem usually rears its ugly head when one of the parties in a lawsuit is a multinational company.  What is a British company supposed to do when it’s sued in an American because of a foul-up by its French Subsidiary?  Do they supply all of the e-discovery materials required by American courts?  What if e-discovery that the American court requires no longer exists because it never needed to be stored in the first place by   French or British?

The European Commission, the executive arm of the European Union (“EU”), responsible for proposing legislation and implementing decisions in addition to running the EU on a day-to-day basis and upholding EU treaties, recently took steps toward untangling this e-discovery web of confusion and contradiction.  The European Commission had previously established the working party, an independent advisory board charged with handling issues relating to data protection and privacy in the EU.

The working party recently addressed the issue of transborder e-discovery relating to data held in Europe that was required to be produced as a result of legal proceedings occurring in the United States.   It recognized that a certain tension had mounted as a result of disclosure obligations under American legal rules differing with data protection requirements in the EU,  the working party also recognized that this was particularly relevant to European affiliates of multinational companies that were getting caught while trying to balance their obligations as a result of American e-discovery demands in connection to litigation and the various data protection and privacy laws governing the transfer of personal information that also varied among the different countries within the EU.  The working party saw that there was a need to reconcile the U.S. litigation requirements and EU data protection provisions and as a result, recommended a set of guidelines to be followed by EU data controllers.  These guidelines were eventually adopted in February 2009.  Among the guidelines adopted were a number of provisions applicable to lawsuit parties, businesses, lawyers, courts, & governments.

One conflict addressed by the working party that is likely the most applicable to e-discovery problems is what is to be done when a foreign company has to concern itself with American document retention rules that may conflict with the rules in the country where the company operates.   Due to the fact that different countries each have different time limits for potential litigants to bring a claim, it was not practical for the working party to establish a particular uniform period of time for data to be stored.  Thus, the guidelines provide as a solution that data controllers in the EU should have a clear policy on data storage, management, and retention.   So as long as the policy comports with local applicable guidelines and the policy is adhered to, the data controller will not be found to be at fault with US law because US rules of civil procedure merely require that existing information be disclosed to the adverse party.   An exception to this, however, is that if there is data relevant to a specific, imminent litigation process, it should be stored even such storage would not otherwise be required by the data storage policy in order to prevent spoliation of evidence.  The guidelines also address the process to be followed when an American court, a “litigation hold of pre-emptive requirement that information be retained.  In such scenarios, the data storage policy and/or and data destruction policy for documents that may be relevant to the legal claim is to be suspended.

This is just one of many problems addressed by the working party.  Their recently adopted guidelines also resolve globally conflicting laws relating to e-discovery issues that include, but are not limited to disclosure of sensitive personal data, consent, proportionality, transparency, rights of access and erasure, data security, and transferring data to third parties.  As a result, any company that does business in the U.S. as well as the EU would be best served by familiarizing itself with the working party’s recently adopted guidelines.

Frank received his B.a. from Wesleyan University.  In addition to being an award winning gardener, he is a third-year law student at Seton Hall University School of Law and can be contacted at fgiantomasi@gmail.com.  After graduating, he will clerk for a New Jersey Superior Court judge.

However, the California amendments depart from the federal rules in a few distinct and important ways.  Lawyers practicing in California must be aware of these changes because failing to adhere to them could result in dire consequences for their clients.

There are two other major ways in which the California rules do not mirror the federal rules.  First, although the California rules set forth certain conditions for limiting the scope of electronic discovery in a fashion similar to the federal rules, a key variation among the rules is that California’s start with the presumption that all ESI is accessible.  Where FRCP 26(b)(2)(B) explicitly limits discovery seeking inaccessible ESI, the California rule shifts the burden to the responding party.  After receiving a request for production of ESI, the responding party must specifically object to the production of ESI on grounds that the information is inaccessible.  Further, if the requesting party moves to compel production, it is the responding party who bears the burden of proving that the requested ESI is in fact, inaccessible.

Second, and perhaps more importantly, the California rules require parties to identify and detail their inaccessibility objections in their responses to discovery requests, regardless of whether they intend to move for a protective order.  Failing to adhere to this rule could result in the responding party’s waiver of inaccessibility as a basis not to produce ESI.  Because the California rules require a detailed response as to why certain information is inaccessible, it is important for attorneys to have a comprehensive understanding of the client’s information technology systems. The earlier an attorney can familiarize his or her self with the client’s IT systems, the better prepared he or she will be to explain what information is inaccessible when served a request to produce documents.  

Bridgewater, NJ (April 23, 2010) – Fernando Pinguelo, a Member of Norris McLaughlin & Marcus, P.A., appeared as a guest on Fox News Channel’s live web show, The Strategy Room, hosted by Kimberly Guilfolye.  Pinguelo was interviewed about today’s headlines featuring internet abuse, including the Security and Exchange Commission Office of Inspector General’s 5-year investigation that revealed SEC employees and contractors visiting porn sites and viewing sexually explicit pictures using government computers. Ms. Guilfoyle’s guests today also included Richard “Bo” Dietl and Dr. Kathryn Smerling. 

The Strategy Room airs weekdays from 9 a.m. to 5 p.m. ET for a discussion of the day’s top stories, plus a variety of hour-long shows on topics like business, health, technology, and entertainment.

“Casual use of the internet in the workplace is on the rise.  With up-to-the-minute Facebook statuses and Twitter ‘tweets,’ the use of company time for personal internet use has become common place.  This has become so common that it is obvious employees don’t realize their actions can be tracked and saved.  This new breaking story testifies to the fact that many workers don’t realize the implications of their actions online,” said Pinguelo.

Pinguelo, Co-Chair of the firm’s Response to Electronic Discovery and Information (REDI) Group, devotes his practice to complex litigation with an emphasis on business disputes, electronic discovery, and media and employment matters.  He has experience in all facets of litigation (trial, mediation, arbitration, and appellate) in both federal and state courts. As a former prosecutor, he has tried numerous cases.  Today, Pinguelo handles a broad spectrum of disputes including copyright infringement, misappropriation of trade secrets, fraud, breach of non-compete covenants, discrimination, and business torts, and is able to address a rapidly evolving crisis or emergency.

A leader in the emerging area of electronic discovery, Pinguelo works with business owners, C-level executives, in-house counsel, and human resources, information technology, and risk managers to develop strategies to manage business and legal issues related to electronic documents. He recognizes that complex contract and statutory considerations impact the evolving business environment. This understanding enables him to help clients comply with the broad array of laws that regulate document management. Pinguelo focuses on preventing claims and pursues strategies that enhance a client’s ability to manage electronic documents because he is keenly aware of the financial and public relations fallout that can result from high-profile electronic discovery abuses and negligence.

Notably, Pinguelo was involved in New Jersey’s first case addressing its new electronic discovery rule amendments, and has lectured numerous times on the topic, including at the Judicial College which provides judges with a wide range of academic programs. He has designed a state-of-the-art electronic discovery law course and teaches one of only a handful of such courses in the country at Seton Hall University School of Law.  Recently, the Fulbright Program, the U.S. government’s flagship international exchange program, designated Pinguelo a Fulbright Specialist for his work in eDiscovery, and he will engage in a project at a university in one of over 100 participating countries.  Pinguelo was also invited to be a member of eDiscovery Group of The Sedona Conference® Working Group Series, a prestigious series of think-tanks consisting of leading experts brought together by a desire to address various “tipping point” issues in each area under consideration.

To view the official press release, click here.

Pinguelo earned his J.D. from Boston College Law School in 1997 and his B.A., magna cum laude, from Boston College in 1994.  He is admitted to practice in New Jersey, New York, and the District of Columbia, and is the founder of eLessons Learned.

This is due to several major reasons. First, oral contracts are often enforceable. And secondly, even in the absence of a formal contract, increasingly deals are made through email and NY courts have read these emails to form a binding contract (this is because that ancient statute of frauds statute was amended to include electronic communications). Three new NY cases illustrate the courts’ willingness to enforce emails as a contract.

Al-Bawaba.com Inc. v. Nstein Techs. Corp., the court enforced an e-mail exchange on a licensing agreement as a “signed writing” under the statute of frauds, because sender typed his name at the bottom of a critical e-mail.

In Stevens v. Publicis, S.A., the court concluded an employment agreement was modified by virtue of the sender typing his name at the bottom of a critical email.

In JSO Assocs. Inc. v. Price, the court held that a typed name at the foot of an e-mail was not necessary to enforce a business broker agreement for a party that arranged to secure purchasers for a business.

So be wary of what you agree to in your next reply.

Though not related to eDiscovery per se, we at eLessons Learned want to alert Law Students and fellow student bloggers of the National Law Review’s writing competition taking place this month.

The National Law Review (NLR) consolidates practice-oriented legal analysis from a variety of sources for easy access by lawyers, paralegals, law students, business executives, insurance professionals, accountants, compliance officers, human resource managers, and other professionals who wish to better understand specific legal issues relevant to their work.

The NLR Law Student Writing Competition offers law students the opportunity to submit articles for publication consideration on the NLR Web site.  No entry fee is required. Applicants can submit an unlimited number of entries each month.

• Winning submissions will initially be published online in April, May, and June 2010.
• In each of these months, entries will be judged and the top two articles chosen will be featured in the NLR monthly magazine prominently displayed on the NLR home page. Up to 25 runner-up entries will also be posted in the NLR searchable database each month.
• Each winning article will be displayed accompanied by the student’s photo, biography, contact information, law school logo, and any copyright disclosure.
• All winning articles will remain in the NLR database for two years (subject to earlier removal upon request of the law school).
• In addition, the NLR sends links to targeted articles to specific professional groups via e-mail. The NLR also posts links to selected articles on the “Legal Issues” or “Research” sections of various professional organizations’ Web sites. (NLR, at its sole discretion, may distribute any winning entry in such a manner, but does not make any such guarantees nor does NLR represent that this is part of the prize package.)

To enter, an applicant and any co-authors must be enrolled in an accredited law school within the fifty United States. Employees of The National Law Review are not eligible. Entries must include ALL information listed above to be considered and must be submitted to the NLR Marketing Coordinator assigned to entrant’s law school by stated deadlines.

Please click here for more information and the official rules of the competition.

In Stengart v. Loving Care Agency, Inc., the Court held that an employee could “reasonably expect that e-mail communications with her attorney through her personal account would remain private, and that sending and receiving them via a company laptop did not eliminate the attorney-client privilege that protected them.”  The Court also held that the company’s attorneys violated an ethics rule by reading the “arguably privileged” e-mails and by failing to alert the employee that they had them.  But the Court did unleash at least one surprise by announcing that even a seemingly bulletproof company policy on workplace computer use that claims the employer could read an employee’s attorney-client communications would not be enforceable if the employee accessed the communication through a personal, password-protected e-mail account.

Ever quickly peek at your web-based personal e-mail account while still at the office?  Yeah, many of us do, too; and we’d be willing to bet a ham sandwich that certain Justices on the New Jersey Supreme Court probably do, as well.  Peeking at her personal e-mail account while still at work is how plaintiff Marina Stengart ended up in front of those same Justices last winter.  After deciding to sue her employer on various employment discrimination charges, Stengart used a company-issued laptop to communicate with her attorney via her personal, password-protected Yahoo e-mail website.  At the time, Stengart had no idea that the laptop was automatically saving copies of each page that she viewed, to a temporary internet file cache folder on the laptop’s hard drive.  After Stengart quit and turned in the laptop, Loving Care forensically imaged the hard drive and discovered images of the e-mails Stengart exchanged with her attorney.  Believing that Stengart had waived any privilege claims, Loving Care’s attorneys cited one of the e-mails in an interrogatory answer.  That belief was supported, initially, by the trial judge who found that Stengart waived the privilege; but the trial court decision was reversed on appeal to the Appellate Division.

On challenge to New Jersey’s highest court, Loving Care argued that the attorney-client privilege did not attach to the e-mails because its company policy regarding computer and internet use at the workplace removed any expectation of privacy that Stengart may have had; and that she waived the privilege because she accessed her e-mail via the company’s computer and server.  The Court disagreed.  After first deeming Loving Care’s Policy “not clear” and as creating “ambiguity about whether personal e-mail use is company or private property,” the Court evaluated case law from other jurisdictions, giving particular attention to (and ultimately following) a Massachusetts case with nearly identical facts.

The Court considered factors by which an employee could be found to have a lesser expectation of privacy in attorney communications.  First, the court distinguished between the use of a company e-mail system as compared to a personal, web-based e-mail account (such as Yahoo or Gmail.)  E-mails transmitted via an employer’s e-mail account might be subject to less privacy than those sent via a personal web-based account.  Second, the Court noted that the physical location of the company’s computer might make a difference in the analysis, suggesting that an employee who works from a home office may be entitled to greater privacy than an employee whose communication is made via the company’s servers.  Third, the Court recognized that other jurisdictions have held that the existence of a clear company policy that prohibits personal computer use may diminish an employee’s expectation of privacy; but, as explained below, the New Jersey Court refused to consider the sufficiency of a company policy as a determination of whether the employer can pierce the attorney-client privilege.

In holding that Stengart’s e-mails were protected by the attorney-client privilege because she could reasonably expect them to remain private, the Court cited three reasons.  First, the Court noted that Stengart had both a subjective and an objectively reasonable expectation of privacy in the e-mails – she had used a password-protected account to access the messages and had not given her password to anyone at Loving Care.  The Court also noted that Stengart had not used the computer to conduct illegal activities.  Third, the Court seemed impressed that the e-mails contained the boilerplate language warning the reader that the information was only intended for the designated recipient and contained privileged attorney-client communications.  But, as mentioned above, the effectiveness of Loving Care’s “Electronic Communications Policy” on workplace computer use was not dispositive.

The Court determined that the Policy was ambiguous, lacked clarity, and failed to warn employees that even web-based e-mails could be forensically retrieved.  But, as the Court stated, even if the Policy were perfectly drafted, it would not be enough to pierce the attorney-client privilege:

[E]mployers have no need or basis to read the specific contents of personal, privileged, attorney-client communications in order to enforce corporate policy.  . . . [E]ven a more clearly written company manual—that is, a policy that banned all personal computer use and provided unambiguous notice that an employer could retrieve and read an employee’s attorney client communications, if accessed on a personal, password protected e-mail account using the company’s computer system—would not be enforceable.

Declining to rely on other states’ case law holding that a clear company policy banning personal e-mails could diminish an employee’s expectation of privacy in attorney-client communications, the Court added that a “zero-tolerance policy can be unworkable and unwelcome in today’s dynamic and mobile workforce and [we] do not seek to encourage that approach in any way.”

What about Loving Care’s attorneys?  Should they have immediately returned the e-mails (which were plastered with the standard “CONFIDENTIAL . . . Attorney-Client communication” language)?  The Court thought so, and ruled that Loving Care’s attorneys violated professional ethics rules by “not setting aside the arguably privileged messages once it realized they were attorney-client communications, and failing either to notify its adversary or seek court permission before reading further.”  Noting the absence of an appearance of bad faith, the Court reiterated that the attorneys “should have promptly notified opposing counsel when it discovered the nature of the e-mails.”

To learn more about Stengart and its rise to the Supreme Court, visit our exclusive Stengart Watch feature which posts articles (and video) on each of the Stengart decisions and on related cases in other jurisdictions.

eLessons Learned is happy to announce a great eDiscovery event taking place on Wednesday, April 7th.

The Hispanic National Bar Association (New York Region) In-House Counsel Committee and Huron Consulting Group invite you to join us for a cocktail reception and in-depth panel discussion.

What Every In-House Counsel and the Law Firms Who Represent Them Need to Know About E-Discovery After “Zubulake Revisited: Pension Committee and the Duty to Preserve.”*

Register Here

April 7, 2010
6:30 PM Cocktail Reception
7:15 PM Program

Intercontinental Barclay
111 East 48th Street
New York, NY

Panelists:
• Ralph Losey, Shareholder, Akerman Senterfitt LLP
• Chris O’Neill, Associate General Counsel, IBM Corp.
• Carolyn Southerland, Managing Director, Huron Consulting Group
• Bill Speros, Director of Litigation Support and E-Discovery, Baker Hostetler LLP

The discussion will be moderated by HNBA In-House Counsel Committee Chairs:
Fernando A. Bohorquez, Jr., Partner, Baker Hostetler LLP
Richard A. Lafont, Shareholder, Akerman Senterfitt LLP

During this session, panelists will discuss the practical impact of Judge Schiendlin’s decision for In-House Counsel and Outside Counsel, including best practices for avoiding the e-discovery pitfalls outlined in the opinion.

For questions, please contact Andrea James Smith at 202-585-6811 or ajsmith@huronconsultinggroup.com

*This session has been approved for 1 CLE Credit in NY, NJ, and PA.

Now, I know what you’re probably thinking.  “Revisit Zubulake!?  But that was so long ago!  Surely everything has changed!”  (Sarcasm)

To be fair, things were quite different back then – no iPhones, no clouds (in the IT world), no Google Any-Application-You-Can-Think-Ofs.  The technology landscape has certainly evolved since Zubulake became a household name.

But (at least) two things haven’t changed:  Judge Shira A. Scheindlin’s view of eDiscovery due diligence and parties’ (and their lawyers’) continued failure to meet these expectations.

In Her Honor’s latest eDiscovery-related opinion, Pension Comm. of Univ. of Montreal Pension Plan v. Bank of Am. Secs., LLC, __ F. Supp. 2d __ (S.D.N.Y. 2010), Judge Scheindlin provides us all with a much needed reminder that sloppy (i.e., negligent or grossly negligent) document preservation and production will expose parties (and their lawyers) to the court’s arsenal of sanctions: from further discovery, to cost-shifting, to fines, to special jury instructions, to preclusion, to the most severe sanction of all – entry of default judgment or dismissal.

If you’re looking for scandalous discovery abuses or headline-grabbing fines, you’re not going to find that here.  This case addresses boring, run-of-the-mill – yet all too common and very serious – sloppy preservation and production actions on the part of clients and their lawyers.

In Pension Comm. of Univ. of Montreal Pension Plan, a group of ninety-six investors filed the initial action in an attempt to recover $550 million in losses after the liquidation of two British Virgin Island-based hedge funds in which they held shares.   During the lengthy discovery process, defendants brought to the court’s attention substantial gaps in some (thirteen of the ninety-six) plaintiffs’ document productions.

These defense allegations led to depositions and affidavits that detailed the steps (not) taken to preserve and produce documents (including electronically stored information). At the close of discovery, defendants sought the dismissal of the complaint or some alternative relief for plaintiffs’ discovery abuses.

All tolled, the court found thirteen plaintiffs either negligent or grossly negligent in meeting their discovery obligations and issued sanctions that ranged from further discovery (at the low end), to monetary sanctions and an adverse inference “spoliation charge” (at the high end).  In true eLessons Learned fashion, let’s take a closer look at exactly why Judge Scheindlin found plaintiffs’ (and their lawyers’) efforts to be “flawed.”

The ‘Pure Heart and Empty Head’ Syndrome

It’s important to point out from the start that Scheindlin’s assessment of plaintiffs’ acts concluded decisively that this was an instance of careless and lazy preservation of data, as opposed to an intentional destruction of evidence.  Nonetheless, she concludes that “there can be little doubt that some documents were lost or destroyed.”   Thus, Scheindlin begins down the path of determining the appropriate sanctions for such conduct, despite plaintiffs’ “pure heart [and] empty head.”

But, before we solve the final puzzle (SAN_TIONS), here are the plaintiffs’ R-S-T-L-N and E (Reckless Steps Their Lawyers Negligently Endorsed):*

The Plaintiffs

• Plaintiffs did not issue an appropriate written litigation hold until a few years after they should have.
• Plaintiffs failed to execute a comprehensive and orderly search for documents.
• Plaintiffs failed to sufficiently guide, supervise, and monitor their employees’ document collection.
• Plaintiffs submitted inaccurate, incomplete, vague, and contradictory declarations that misled defendants and the court about plaintiffs’ document preservation and production efforts.
• Plaintiffs failed to adequately prepare and produce witnesses with knowledge about document preservation and production efforts, including which files were searched, how searches were conducted, who was asked to search and what they were told, and the extent to which employees’ efforts were supervised.
• Plaintiffs’ document preservation and production efforts were found to be “severely deficient.”
• Plaintiffs failed to collect or preserve any electronic documents prior to their belated litigation hold.
• Plaintiffs failed to request documents from key custodians and witnesses.
• Plaintiffs’ memoranda (purporting to be litigation holds) never specifically instructed employees and key custodians not to destroy records.
• Plaintiffs designated employees with no experience conducting searches and who received no instruction on how to conduct searches, had no supervision during the collection, and had no contact with lawyers during the search.
• Plaintiffs unduly limited the scope of persons with relevant documents to the point of excluding many more who did in fact have responsive documents.
• One plaintiff’s representative admitted that she failed to search an executive’s PalmPilot, which may have contained relevant emails.
• One plaintiff’s general counsel at first declared that he supervised his company’s document search efforts; but later testified at a deposition that he delegated the search to a paralegal.  When pressed, he did not know the details of the paralegal’s communication with employees regarding preservation or whether employees complied. In fact, general counsel signed his declaration without fully investigating his company’s search efforts, and he lacked personal knowledge of many of the issues raised in his declaration.

Their Lawyers

• Lawyers’ telephone conversations, emails, and memoranda instructing plaintiffs to be over, rather than under, inclusive and noting that emails and electronic documents should be included in the production were not enough to constitute an effective litigation hold.
• Lawyers’ subsequent monthly case status memoranda, which included additional requests for documents, were not enough to constitute either an effective litigation hold or adequate monitoring.
• Lawyers failed to focus efforts on discovery while a three-year discovery stay was in place.
• Lawyers failed to sufficiently guide, supervise, and monitor their clients’ document collection.

* – On the surface, these actions may appear intentional or wanton to the unsuspecting eye.  However, what “saved” these thirteen plaintiffs was the fact that these errors were corrected later through the filing of amended declarations and other curative conduct.

Wheel of Sanctions

Now back to the sanctions.  Scheindlin stated “a plaintiff’s duty [to preserve information] is more often triggered before litigation commences, in large part because plaintiffs control the timing of litigation.”  Here, as with other cases we’ve blogged about, “the breach of the duty to preserve, and the resulting spoliation of evidence, may result in the imposition of sanctions by a court.”  Recognizing that not all sanctions are created equal, Scheindlin addresses which sanctions would be proper under the circumstances.

She explains that for fines, cost shifting, and other “less severe” sanctions, the crux of the matter is the conduct of the spoliating party.  For more severe sanctions (i.e., dismissal, preclusion, and adverse inference jury instructions), “the court must consider, in addition to the conduct of the spoliating party, whether any missing evidence was relevant and whether the innocent party has suffered prejudice as a result of the loss of evidence.”

Scheindlin employs the following burden shifting test to deal with the burden of proof in cases such as this one, which seek more severe sanctions for egregious conduct:

1. When the spoliating party’s conduct is sufficiently egregious to justify a court’s imposition of a presumption of relevance and prejudice, or when the spoliating party’s conduct warrants permitting the jury to make such a presumption, the burden shifts to the spoliating party to rebut that presumption.
2. If the spoliating party demonstrates to a court’s satisfaction that there could not have been any prejudice to the innocent party, then no jury instruction will be warranted, although a lesser sanction might still be required.

The Final Spin

After a lengthy and thorough review of the facts (indeed, Judge Scheindlin estimates that, collectively, almost 300 hours were spent on the motion and opinion), the court found that plaintiffs “failed to execute a comprehensive search for documents and/or failed to sufficiently supervise or monitor their employees’ document collection.”  Scheindlin concludes with the lesson of this case:

While litigants are not required to execute document productions with absolute precision, at a minimum they must act diligently and search thoroughly at the time they reasonably anticipate litigation.

The failure to issue an effective written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.  Furthermore, a litigation hold that places total reliance on clients’ employees to search and select what they believed to be responsive records without any supervision from counsel is not “effective.”

In the end, jurors will receive instructions that they are permitted to presume the lost evidence is relevant and favorable to the defendants.  Additionally, plaintiffs must now deal with monetary sanctions on top of their alleged $550 million losses.

Scheindlin set the precedent for the consequences of this sort of behavior in Zubulake and subsequent decisions. Courts are not going to accept excuses for disregarding now-standard principles and practices.  Attention must be paid to avoid the pitfalls documented by Judge Scheindlin.  Heed her warning because with one spin of the Wheel of Sanctions, you might not be able to afford buying a vowel.

Generally, this network of servers, referred to as the “cloud,” allows users access to resources and data as needed and at extremely high processing power.  The resources of an entire network, as opposed to those of a single computer, are made available to users in a method analogous to a supercomputer or virtual network server.

Private companies, such as Terremark Worldwide, provide the infrastructures for cloud computing.  Users do not own the equipment that makes up the network available to them.  Instead, they rent access to these networks from private companies on either a subscription or pay-per-use basis.  The private companies then extend the capacity and capabilities of their existing infrastructures over the network for use by their users.  The key to cloud computing is that it allows companies to increase their available capacity and add capabilities at any point in time and at a low cost because they are able to do so without having to invest time and money into building new infrastructures for themselves.

Cloud Computing offers many benefits for its users.  Initially, it has large cost reduction benefits – a feature that may make it increasingly desirable given the current state of the economy.  It also proves useful in sorting through vast amounts of data.  Finally, in addition to its reliability, cloud computing also provides flexibility by enabling users to have access to the system by way of a web browser no matter where employees are or what kind of device they use.

However, now that you know the silver lining of Cloud Computing, it is important to note its drawbacks, too – because the infrastructures are provided by third parties and are made available over the internet, security is always an issue.

Cloud Computing is quickly growing in popularity and is even being employed by and gaining support from the federal government, which is in the process of moving its federal information portal, USA.gov, to this type of infrastructure.  The government sees the obvious benefits of Cloud Computing as a way to save costs; and although data security is of particular salience for the government, sites such as USA.gov are “the perfect candidate[s] for cloud computing” because the data published thereon is intended to be available to the public anyway.

So is Cloud Computing right for your company?  That’s a judgment call that only you can make; but luckily enough, there are many resources available over the internet (of all things!) to help you make a decision.

For example, and discussion of many current issues, see Information Week’s Cloud Computing blog: http://www.informationweek.com/cloud-computing/

Image, courtesy http://bhopu.com/Images/20080709_Amazon_Ec2_Cloud_Computing.jpg