The fine print

One of the ways to go truly insane is to read the terms of service for these clouds. While the people who wrote the old co-location contracts could try to imagine the data as living on a single server that was in a certain box owned by a certain person and residing in a certain jurisdiction, all bets are off with a cloud. The whole point is that it isn't confined to one box, one building, or even one country.

Some of the service agreements are very specific and clear. GoGrid, for instance, spells out numerical thresholds for standard values such as latency, jitter, and packet loss for the six continents. If the cloud doesn't meet them, GoGrid promises to give you service credits for 100 times the amount lost.

Other terms are deliberately murky. You might consider it fairly capricious for Amazon to demand the right to terminate your account "for any reason" and "at any time," but the company also carefully reserves the right to terminate your account for "no reason" too. In other words, "It's not you, honest. It's me. No. I take that back, it's not even me. It's just over between the two of us. No reason."

Google's terms seem more generous, indicating it will terminate accounts only if you breach the terms of the agreement or do something unlawful. But Google does reserve the right to "pre-screen, review, flag, filter, modify, refuse, or remove any or all Content from the Service." I want to say that the terms seem more reasonable than they were when I read them several weeks ago, but I can't be sure. And it doesn't matter too much because new terms apply whenever Google wants to change them, and you signify your acceptance by continuing to use the service.

If you think it's hard to work through the legal rules when a server is in one state and a user is in another, imagine the right answer when your virtual server could migrate within a cloud that might encompass datacenters spread out across the globe. Amazon's terms, for instance, prohibit you from posting content that might be "discriminatory based on race, sex, religion, nationality, disability, sexual orientation, or age." It sounds like Amazon is worried that part of the cloud might touch down in a municipality that forbids things like this.

It almost seems scary to mention this fact, but New York is insisting that Amazon charge sales taxes because Amazon pays a commission to Web sites that do business in the state. What does this mean for applications hosted by Amazon? Do you owe sales tax if your application touches down in a part of the cloud that's in New York? Do you owe income tax?

I wanted to make some allusion to Schrodinger's cat and imply that we can't know where the computation occurs in the cloud, but then I slowly realized that this is far from true. Cloud servers have log files too, and these log files can produce insanely detailed analyses of who might owe which taxes. Major league athletes already hire tax attorneys to compute their share of income earned in each stadium, and some people are suggesting that Web companies aren't paying enough to support the local fire trucks and orphanages. Say good-bye allusions to Joni Mitchell; it's time to start invoking Warren Zevon's "Lawyers, Guns, and Money."