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Cloud Computing: Opportunities Used Safely
March 30, 2010, Volume 56, No. 27

Penn faculty, staff and students are finding more and more ways to utilize technology to better serve our mission of teaching, research and education.  The availability of infrastructure, software and services in “cloud computing” adds important and attractive tools for our community to use. 

The guidance below is offered to assist members of the Penn community in understanding when the use of cloud computing services is permissible and when it is advisable.  We encourage all faculty, staff and students to review this guidance and to raise questions with either of our offices, or the Office of General Counsel, pertaining to risks and opportunities in cloud computing. 

—Robin Beck, Vice President, Information Systems and Computing

—Mary Lee Brown, Associate Vice President, Audit, Compliance and Privacy


Cloud Computing: Opportunities Used Safely

This guidance is to describe opportunities, issues, safeguards and requirements regarding the use of certain third-party services (often called “cloud computing” services) involving University data. While there are many uses of the phrase “cloud computing,” in general, it refers to free or low cost services offered worldwide to any individual user where resources, such as infrastructure or software, are provided over the Internet. In many cases, data resides on the cloud provider’s servers. 

The developments in cloud computing in recent years are providing new opportunities for many faculty and staff at Penn to communicate, collaborate, and compute more effectively to serve Penn’s mission.  For example, social networking sites may be appealing as interactive course communication tools, and as platforms to support formation of constituent groups.  Faculty and staff may sometimes wish to use third-party online data storage to house teaching, research and administrative data. A variety of collaboration tools also exist “in the cloud” that can facilitate research and related endeavors involving colleagues at Penn and all over the globe.  These online services, which are often free or low-cost, can seem very inviting.  Usually, individuals are prompted to sign up for such services under a “click through” (i.e., non-negotiable) agreement and pay only for the resources they directly use. However, there are compliance and other risks when Penn data is shared outside of Penn. This guidance is intended to explain those risks, given the existing technology.  As the technology changes, which it will, we will update this advice accordingly.


(1) Each faculty and staff member considering a cloud computing service should consider the following issues before sharing Penn data 1 with a cloud computing service:

a. Sharing Penn data with a company that is new and may go out of business is high risk, particularly if there is no backup at Penn. Important work could be lost forever.

b. Sharing sensitive, private information about individuals could present significant privacy and security risks if the cloud service provider is not providing assurances of strong privacy and security practices. 

c. Some cloud providers store data in other countries—this could present a problem of foreign government access to data of interest and also could pose export controls problems (again, consider the nature of the work being performed).

d. See a fuller list of issues in Attachment A. It is important to consider the type of project and type of data involved in working through the issues list in Attachment A.  For example, when sensitive personal data or critical business data to support Penn’s operations are involved, one should be very cautious and ensure that proper controls exist to address the concerns raised in the Attachment.

(2) It is unlawful to share certain types of data with a cloud provider—or any third party—unless there is an agreement that properly reflects legal requirements. For example, data privacy protections provided by HIPAA 2 , by FERPA 3 , and often by funding agencies require specific language in agreements with third parties handling regulated data. At this point, most “terms of service” that cloud providers ask users to “click through” to agree upon, do not contain such language. Faculty and staff must not utilize cloud providers to handle HIPAA, FERPA or other regulated data unless the terms of service contain the required language or unless there is a negotiated agreement to ensure compliance. The Office of General Counsel or the Office of Audit, Compliance and Privacy should be consulted where any questions arise in this area.

(3) Special Note Regarding E-Mail. In cases where individuals have two active e-mail accounts—a Penn account and a separate account with a third-party provider such as Gmail or Hotmail—the Penn account alone should be utilized whenever practicable when dealing with the information described above. In cases where an individual uses the Penn account only for automatic forwarding to a third-party e-mail provider, faculty and staff should take special care not to include information described above in e-mail, unless a negotiated agreement governs the third-party e-mail account or the terms of service contain required language for compliance.

(4) There is a legal requirement that where Penn data is shared with a third party, the faculty or staff member sharing such data must be able to retrieve it when asked. At times, Penn must ask faculty and staff to provide certain data for legal, investigatory and compliance reasons. Sometimes that means individuals must bring work papers to campus from home; sometimes IT staff must retrieve data from backups. 

Similarly, where faculty and staff are storing Penn data with third-party online services, they must be prepared to access and provide such data should a legal, investigatory, or compliance reason arise. Therefore, it is impermissible for faculty and staff to utilize a third-party service where they will lose the ability to access and retrieve the Penn data they share with that service. 

In short, faculty and staff considering sharing certain data with any third-party services have a responsibility to review and follow this guidance.  Where such sharing is permissible, faculty and staff should also review the terms and conditions of using such services to make sure that the issues highlighted in this Guidance, including Attachment A, are properly addressed.  If there is any doubt about the proposed agreement please consult your IT Local Service Provider (LSP), your School or Center Security or Privacy Liaison, or the Office of General Counsel or Office of Audit, Compliance and Privacy.

Attachment A

For data that can be shared with a third party, consider the following issues before utilizing third-party “cloud” services:

There may be instances where Penn faculty, staff members, post-docs or others wish to utilize third-party services for data relating to research, scholarly or other purposes. If the data at issue is not regulated by privacy or security laws, such services may be appropriate. However, consider the following issues:

Continued availability of data. Certain services are more reliable than others and some may be able to demonstrate their reliability.  Consider this and the consequences of a service becoming unavailable or a company going out of business. In such cases, would you be able to gain access to the data you entrusted to the service? Would your business continuity needs be met?

Ownership of data. Each service has its own terms and conditions of use.  Some terms and conditions may assert that the service can exercise rights over data in its possession, now or in the future. Also, services often reserve the right to change their terms and conditions without notice.  Consider whether unencumbered data ownership rights (for example, intellectual property rights) are important with respect to your data. 4

Security of the information. Some services may utilize adequate technical safeguards, physical access controls and limitations on disclosure; others may not. These are important factors to keep in mind if you wish to protect your information from unintended disclosure. A third-party certification such as a TRUSTe seal or a European Union Safe Harbor certification can provide some added comfort that a security review has been conducted. 

Privacy controls. If the service involves data-sharing activities, the user may wish to limit data access in certain ways. Determine whether the service provides an easy and reliable way to limit data sharing in accordance with your wishes.

Contractual/Funding Obligations. The program may have agreed to certain data protection terms in a contract, or via the requirements of a funding agency or other organization. Review any agreements to ensure that sending of data to the third party is permissible. 

Jurisdictional issues. Different legal requirements may be triggered by different data locations. For example, Amazon provides data storage services located physically in the US and Europe, and allows users to keep their data in whichever they choose. Where data resides can have important legal implications in terms of (1) whose law applies and (2) the likelihood of foreign government access to the data. 

Export Controls. A related issue lies in the area of export controls.  If you are working with export-controlled information or software, the computing environment you are working with becomes very important.  You may unwittingly be “exporting” certain information without a license where one may be required. Those unsure of whether information or software is subject to export limitations should consult Penn’s Export Controls resources at www.upenn.edu/researchservices/exportcontrols.html.

Support. Consider the potential consequences of using a service whose support level may be unknown. You may need support services to, for example, address difficulties in using a particular application, conduct a search involving large volumes of data, or retrieve data for use by colleagues in the event of your inability to do so (for example, during a hospital stay). 

Note: Internal resources may meet your computing needs without taking on the risks that exist “in the cloud.” For example:

• Secure Share is a web-based application for secure file exchange available to Penn faculty and staff. See www.upenn.edu/computing/security/secure-share/.

• Course portals such as Blackboard offer a secure means of communicating with students, including collecting assignments and providing grades. 

• Information System and Computing provides a secure Instant Messaging Service to Penn faculty and staff. See www.upenn.edu/computing/im/.

• Your School or Center may also provide alternatives that should be considered before utilizing cloud services. Consult your local support provider for more information.


“Sharing” as used in this guidance means to provide data that is in plain text, or which the third-party online service has the capability to decrypt.

Entities that are covered by the Health Insurance Portability and Accountability Act (“HIPAA”) are required to ensure the confidentiality of protected health information (“PHI”).  In general terms, PHI includes all health information that is personally identifiable. As with education records, PHI may not be shared or stored with third parties unless an appropriate contractual agreement is in place to protect the data. It is worth noting, in addition, that the recent economic stimulus legislation greatly increased the penalties associated with HIPAA violations.

The Family Educational Rights and Privacy Act (“FERPA”) requires that education records be protected from inappropriate disclosure, as defined by the Act.  Under FERPA, education records include all records that are directly related to a student, and maintained by Penn. Examples include student grades and student assignments that are handed in. Education records may not be shared or stored with third parties (including online services) unless the party is under Penn’s contractual control regarding the use and maintenance of the records.

Note also that a Penn constituent using the University logo online or elsewhere is responsible for assuring that the logo is used appropriately.

See www.business-services.upenn.edu/publicationservices/download.shtml.

Almanac - March 30, 2010, Volume 56, No. 27