New Cloud Problem: Botched Fed Raids

Bookmarketing site Instapaper had a surprise yesterday: the FBI mistakenly took a server that helped run the site during a raid to find a malware distributor. Apparently agents went into a data center of hosting service DigitalOne with a warrant to seize equipment a client used to distribute malware, but took servers that ran sites for dozens of other companies. Oops.

Instapaper had the misfortune of hosting its data in the wrong place at the wrong time. Bad luck, clearly, but something that could more easily happen in a world of outsourced hosting and cloud computing. Legal action to seize data from one company can easily spill over to innocent businesses, and, as in the case of Instapaper, they might only learn about the problem when reading a news report because the hosting or cloud provider doesn't say anything.

The more typical problems you see in cloud computing are technical outages often associated with scaling problems or security issues. But the potential business issues will be just as much of a problem. Confused operations, bad communications, inaccurate billing -- all can have a negative impact on customers, and all can offer reasons to people and companies not to use cloud services.

In the DigitalOne incident, a lot of businesses suddenly felt the impact because an FBI team didn't understand some basics about technology, as the New York Times reported:

In an e-mail to one of its clients on Tuesday afternoon, DigitalOne's chief executive, Sergej Ostroumow, said: "This problem is caused by the F.B.I., not our company. In the night F.B.I. has taken 3 enclosures with equipment plugged into them, possibly including your server -- we cannot check it."

That FBI agents assumed an enclosure was the same as a server is bad enough. But for DigitalOne to be unable to know which companies were affected and then not to contact all clients to warn them of the potential problem is astoundingly dense. And it took three hours for DigitalOne it to get notification from the data center operator from which it leases space. Outsourcing on top of outsourcing almost guarantees a problem.

Every time a provider screws up in a major way, it mars the reputation of the entire cloud concept just a little bit more. The bigger the name and problem, the bigger the dent in the side of the cloud.

High tech is too used to winging its way to success and getting the growing pains forgiven. But when you tell companies that you can support basic business operations, you've immediately stepped into the grownup leagues. If you can't match the promises with the practices, you shouldn't be in that industry.

And things will only get worse. Politically-connected people are already suggesting that intelligence agencies have even fewer restrictions on their digital investigations. At what point do businesses say that they can't take a chance on a more "efficient" way of doing business if they can't count on being able to do business?

Relate:

• Citi Drags Feet on Data Breach. Send in the Regulators!
• WWDC: Apple Blows an Opportunity To Change the World
• HP's Twin Problems: New Strategy and New Management
• Cloud Computing: Can't Anyone Play This Game?
• Sony Plays Its Chump Card: Lack of Security Makes the Xbox Look Good
• Amazon Outage Shows How Web 2.0 Becomes Web 0.0
• Microsoft's BFF: Google Gmail Outage, Day 3

Image: FBI Erik Sherman

Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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