Since before the modern-day personal computer was invented, the development, acquisition, and application of information technology has been crucial to a company’s success. While technology is sometimes developed in-house, it is more often licensed from enterprise software companies. In the past year, several developments have changed the terms and conditions under which enterprise software is licensed, which in turn has created risks for those businesses that are unaware of the ramifications of these changes.
For example, while cloud-based software has existed in the enterprise-space for several years, the large enterprise software vendors, such as Oracle and SAP, went all in on the cloud in 2014. As a result, companies were forced to evaluate new cloud-related licensing terms for the first time. Because the software procurement cycle moves quickly, some businesses were unprepared to consider the legal intricacies of placing these new terms. In such instances, a company’s procurement team was often forced to choose between two equally undesirable outcomes: deny the demands of their users for access to data; or give control of the company’s most private information to a third party without fully appreciating the inherent complexities and risks.
One such complexity is the treatment of a business’s confidential information when it exists solely on a platform outside that business’ direct control.