Written By Martin P J Kratz, QC, Duncan Card and Michael Whitt, QC

The business advantages of cloud computing are compelling, and will undoubtedly push more businesses, large and small, to consider using cloud services to replace or enhance current computing resources. However, adopting cloud computing involves the same principles and concepts of an outsourcing transaction, since the business relies on the provision of data processing and other technological services from third parties outside your enterprise. One of the main areas of common ground is that concepts relating to goods or licensing have little or no application because the cloud consists primarily of a provision of services. That distinction provides unique challenges for companies (and their lawyers) adopting cloud service arrangements over internal computing infrastructure. Against this background, this article examines the following: What is cloud computing? Cloud computing arrangements. Cautions when using cloud computing. Contract checklist. Written by Martin P.J. Kratz, QC, Duncan Card and Michael Whitt, QC and published in Practical Law Company's PLC - Cloud Computing: A Primer for Outsource Lawyers.