This past April, Amazon's Elastic Compute Cloud service crashed during a system upgrade, knocking customers' websites off-line for anywhere from several hours to several days. That same month, hackers broke into the Sony PlayStation Network, exposing the personal information of 77 million people around the world. And in June a software glitch at cloud-storage provider Dropbox temporarily allowed visitors to log in to any of its 25 million customers' accounts using any password—or none at all. As a company blogger drily noted: "This should never have happened."
And yet it did, and it does, with astonishing regularity. The Privacy Rights Clearinghouse has logged 175 data breaches this year in the United States alone, involving more than 13 million records.
Such statistics should give you pause, especially if you plan to entrust information that used to exist only on your own computer to an online provider's machines. And yet it's very hard these days to avoid that. Whenever you update your status on Facebook, check your e-mail via Gmail, post your vacation photos on Flickr, or shop, bank, or play games online, you are relying on somebody else's computers to safeguard your stuff. Many businesses, too, are buying into the promise of using computers they don't own or operate, because it gives them affordable and convenient access to computing resources, storage, and networking, as well as sophisticated software and services, that they might not otherwise be able to afford.
Regardless of how exactly they use such Internet-based computing services in "the cloud," these businesses stand to benefit. They gain in particular from the cloud's ability to pool equipment, allowing them to pay only for the resources they use and to scale their operations up or down almost instantaneously. Need more capacity? Just lease it from the burgeoning number of cloud providers, including Amazon, Google, Microsoft, or the company we work for, IBM. Cloud services also provide their customers with detailed metrics that track just how they use their cloud resources. And customers no longer have to wait around for the tech-support guy; their interactions with the cloud provider are almost entirely automated. So rather than being burdened with the expense and effort of procuring and maintaining an in-house computer network, even the smallest business can operate as if it had a world-class IT system.
More and more companies are doing just that. That's why, according to analysts at the technology-research firm Gartner, by next year 20 percent of all businesses will no longer own their own servers. That percentage is likely to grow in the coming years. In short, cloud computing is here to stay.
But this transformation of the IT landscape brings with it some new problems stemming from the very nature of outsourcing and from sharing resources with others. These problems include service disruptions and the inability of cloud providers to accommodate customized networks. But the top concern that businesses have with cloud computing, repeated surveys have found, is security—with good reason. By moving its data and computation to the cloud, a company runs the risk that the cloud-service provider, one of the provider's other customers, or a hacker might inappropriately gain access to sensitive or proprietary information. Customers just have to trust the cloud-service provider to safeguard their data. But unexpected things can and do happen, even when you're dealing with well-established and presumably well-run companies. So it's no wonder that many IT managers remain jittery. If businesses are going to reap the full benefits of cloud computing, cloud providers will need to do much more to address security concerns. Here's an overview of how we think they could start.