As we approach the half-way point of 2019, we stand on the precipice of technological revolution. Most of the tools tipped to change our lives several years ago have reached maturity; artificial intelligence has moved beyond concept to reality; Industry 4.0 is starting to drastically change the way goods are procured and data has become the most valuable currency in our digitally-driven society. If that wasn’t enough, the roll-out of 5G across the UK is encouraging the proliferation of internet-enabled devices and the creation of smart cities.
Naturally, with leaps in technology come regulatory developments as governments rush to keep apace and write the rulebook for concepts previously unimaginable: self-driving cars, blockchain technology, AI and quantum computing to name but a few. While such legislation will take years to be introduced and ironed out as society familiarises itself with new technological capabilities, we can expect to see the following trends come to the fore in the next few years:
As organisations undertake large-scale digital transformation projects and move from on-premise IT to a cloud-based infrastructure, IT lawyers can expect the volume of cloud contracts passing their desks to increase through 2019 and beyond. One key trend beginning to emerge is the adoption of hybrid cloud platforms which combine the scale of large, ‘core’ data centres with smaller ‘edge’ data centres.
Whether they choose to adopt Infrastructure (IaaS), Platform (PaaS) or Software (SaaS) cloud services, negotiating and drafting watertight contracts ahead of a digital transformation project will be critical to the success of the organisation. There will also be the question of terminating legacy contracts, determining dependencies between new agreements and ensuring an effective exit plan. Beyond getting contracts in place, organisations will need to ensure the appropriate frameworks are in place with regard to governance, risk and compliance for cloud security. Partnering with specialist IT lawyers will be paramount to ensuring best practice and obtaining vendor assurance.
As discussed in our recent blog, the arrival of quantum computing will inevitably transform the fundamentals of computer processing forever. By allowing for a for a large number of processing tasks to be undertaken concurrently, quantum computing promises vast potential in fields such as encryption, the internet of things, artificial intelligence and scientific discovery. Though it will likely be another few years until QC uptake starts in earnest, the legal implications of quantum computing capabilities are significant enough to deserve early consideration.
For instance, if a sophisticated quantum computer of the future is capable of cracking existing encryption standards in incredibly short time-periods, information security departments will soon need to invest in quantum-resistant cryptography. While the security standards that have been enacted across industries in response to the GDPR and NIS directive accommodate for current ‘state of the art’ technology, the encryption standard in the quantum-powered world will likely take a very different shape.
While blockchain has already shown its potential to shake-up such business operations as asset tracking and B2C insurance, it’s likely blockchain will not enter the commercial mainstream before 2020. When it does, there will be a number of challenges, risks and legal implications to address prior to adoption. For instance, while one of the main USPs of the blockchain is that once data is recorded, it cannot be changed, this clearly has implications for data privacy, particularly where the relevant data is personal data or metadata sufficient to reveal someone’s personal details.
What’s more, the transparency of blockchain transactions at present could act as a barrier to adoption due to the privacy needs of certain sectors such as banking and finance. Blockchain-based solutions of the future will likely move towards privacy-protecting models that ensure compatibility and promote up-take across such industries. This could mean limiting who can join the blockchain network to “trusted” nodes and encrypting the data on the blockchain, but it is yet to be seen what challenges this approach could present.
Further, blockchain makes possible the use of so-called “smart contracts”, blockchain based contracts which are automatically executed upon certain specified criteria coded into the contract being met. As smart contracts are prewritten computer codes, the use of this blockchain-based method may present enforceability issues if attempting to analyse them within the traditional definition of a contract.
In the second half of 2019, steadfast adoption and integration of AI in business is set to continue. According to research consultancy Gartner, business value derived from AI will grow annually at 50% over the next few years (from $1.2tn in 2018 to $3.9tn by 2022). At present, emerging AI models gaining traction include the AI machine learning platforms (AIaaS) of the large cloud providers (Amazon, Microsoft, Google and IBM Watson) where costs are determined by the number of hours, transactions and training units. Just as with the cloud migration, this means organisations should be gearing up to negotiate and formalise the right AI-related agreements to ensure value can be extracted from cutting-edge intelligence systems.
In an era of fast-paced technological advancement, digital disruption is no longer a mere buzzword: ever since the launch of Uber, every industry has been on guard about a potential tech disruption and the legal implications that follow. With the vast influx of new technology service offerings coming to market, the need for organisations across every sector to source specialist legal advice could not be greater.
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