from A Consultant's View June 2010
Cloud computing is the current rage among IT professionals. It is where someone else is hosting not just web pages, but whole business systems. The allure of moving systems to the Cloud is that things will be much better (and cheaper) than having to manage systems ourselves. Who can argue with "cheaper and better"? The problem is that all the issues have not been fully explored and one issue is security.
Security on "Cloud Computing" is a big issue. While we have not heard of people being hacked while their data is on the "cloud", that is only because the technology is too new for the big stories to leak out. Anywhere data is - it can be compromised. It can be compromised by an outside attack or from within the "cloud" provider. For an example of an inside attack, in January 2009, an engineer at Fannie Mae was indicted for trying to put in some logic that would have destroyed all 4,000 of their servers. Once there is enough important data on "the cloud", there will be people trying to get their hands on that data illegally.
Another problem is what will happen when the "Cloud" provider updates their system. It is possible to have a security hole opened when the system is updated. For example, Facebook updated their system and exposed a lot of data that people thought was secure. Other systems have had embarrassing security failures when making changes.