Living in the Clouds

But what about information security? Companies queasy about storing sensitive data on someone else's servers will ultimately face facts: Google and Amazon probably know a bit about securing data. Adam Selipsky of Amazon Web Services says it's the first question he gets from potential clients. "Amazon has a pretty good, long history of dealing with confidential data, like credit cards," he says. "We take security pretty seriously and feel pretty good about the security mechanisms we have in place."

Still, last Friday Amazon's online store went down for a couple of hours. There are no indications the outage affected other companies' data stored on their servers. But it's a reminder, says Carr, that whenever you're building a complex new infrastructure, there are going to be glitches along the way. If there's a big outage in a system that a lot of companies depend on, the cloud computing model could suffer.

Then there is the fact that the storage and transmission of data across geographical lines can raise thorny legal and political issues: last year France prohibited government officials from using BlackBerries because the servers that house their messages reside in the United States, the United Kingdom and Canada. Indeed, under certain circumstances, it's possible for government agencies—like the National Security Agency or FBI in the United States—to tap into information online and in data centers. Smart countries and companies ought to think carefully before putting sensitive government and commercial information where other governments could possibly peek at it.

"Until those issues are sorted out we don't really know what the structure of this whole industry is going to look like," says Carr. "I don't think any of this is a deal breaker, because the model works. But I do have a sense that the hype about the cloud may be getting ahead of the reality." Sounds like a slightly cloudy forecast, with clear skies further on ahead.

© 2008