Megaupload fiasco reinforces dangers of the "Public Cloud"

Right now, every technology consumer is being inundated with service providers who want their data. The idea that data is a valuable asset and that the people who control your data will be very wealthy someday, is one of the big reasons why IT companies are building so much in the cloud. IT guys want this stuff, it makes our lives easier and it makes our customers happier. It lets us do things with technology that never before were on the table.

A very large, and probably the first, cloud sector out there is in "online storage". We run into these issues with our data - do we put it on our local computers? Then we have to protect our local data with backups. If we do that, then now we have another problem which is how do we share our data? Do we punch holes through every consumers firewall who wants to share photos and files? If we do that, how do we keep all these people secure? Well, the better choice seems to be - take it to the cloud!

Upload all your data and store it there, because you can share it with other people, keep it secure, and let other companies worry about how to back up their own systems which also includes my data.

Now all this sounds great, until a news story like this hits the ground

http://www.msnbc.msn.com/id/46190158/ns/technology_and_science-security/

Here we have a case and point for not storing data in the cloud.

What happened is a "cloud based file storage service" was raided by the FBI. All their data was frozen, however most of their data lives on other "cloud storage servers" that they lease from other companies. When the feds came in, they froze all these guy's assets and shut down their site immediately. Users had no warning, no time to even try to download their data, they simply woke up one morning and none of their data was available. This includes their private documents and private photos.
Since Megaupload leases storage from other companies, they must pay these companies cash every month to keep the data their storing. Guess what? Their cash accounts are frozen! So now, these "subcontractors" for mega uploads are faced with a decision - retain thousands, if not millions of terabytes of data they aren't being paid to store anymore, or delete the data and free the room up for other paying customers. The policy at these companies is quite clear - after so much time, unpaid data storage will be deleted.

This puts everyone (except the feds) in a precarious position. If for some reason the owner(s) of this company - who are now in jail cells, gets acquitted, then the only recourse that Megauploads has is going to be to sue the United States Government, because once the data is gone, it is gone forever.

In this case, the site in question probably won't win in court and the owner(s) are likely going to jail, but keep in mind, this is a Hong Kong citizen who lives in New Zealand who the US FBI flew helicopters up to his house and violently raided his home and took him into custody. I'm not saying this guy was a good guy, but he had his bases covered pretty well, and the FBI's one and only reason for "justification" was that Megauploads at some point was running some server or servers in Virginia. Probably, my guess is, those systems might have very well simply been hosted with Amazon's cloud infrastructure.

So this sets a very dangerous precedent where the law and technology will continue to put at risk the lives of every day users of that technology, because when the feds put a lock on the front door of your data center, and shut everything down, everyone who had anything there - legitimate or not, is at grave risk.

I think this is not the last we have seen on this story, and I think there are many more stories like this one to come.