Cloud Computing

That’s very worrisome for some industries, but in most situations, there are encryption tools that can disguise the data to anyone outside your firm. “The key security issue for the clouds is transparency and understanding what your cloud vendor is doing with that data,” Reese says. A cloud provider should be able to explain what information is encrypted, and how it is encrypted, he says. If a provider can’t answer those questions, you have to assume it is not encrypted; and if it’s not encrypted, you have to assume the whole world could end up seeing that data.

As important as security is continuity planning. The number of cloud providers is billowing, and many of them will fail. As it stands today, moving data and applications from one cloud service provider to another isn’t a simple task. It’s cheap and easy to try a new cloud, but once you’ve invested the time to build an infrastructure in a particular cloud, it’s often going to take an equal or greater investment to switch to another provider.

To protect themselves from the possibility of a cloud vendor failing, companies should regularly pull data out of the cloud and have a plan to move it in the event of a failure—even if the cloud provider is a giant like Amazon or Microsoft. If the past year has taught us anything, it’s that giants fail, too, Reese notes: “If [the provider’s clients] don’t have any kind of business continuity plan around their cloud infrastructure, they will follow that company out of business.”

Head In(to) the Clouds

Cloud computing doesn’t eliminate the need for technical expertise. Companies will still need experienced systems administrators. It takes a level of technical ability to launch an application in the cloud, just as it does in a data center, say Jason Baker, chief technology officer at Visi, a Minneapolis managed hosting company.

That expertise is less than what it takes to manage in-house hardware. However, more companies are deciding that running a data center is not really part of their business, Thickins says.

Some are waiting for more cloud-computing standards to emerge, which could take a while to be accepted by a majority of vendors. “My belief is that we’re about a year or two away from seeing more generalized adoption by small- and medium-business and larger enterprises,” Baker says.

Most companies aren’t going to abandon existing data centers anytime soon, but look for them to use a mix of their own computers and the cloud. Meanwhile, thousands of small companies will be using the cloud exclusively, especially the newer and younger firms, Thickins predicts.