Cloud security fears are overblown, some say

Customers should be more realistic and consider just how well the security of cloud-based services stacks up against what they achieve in-house

Frank Gens, IDC's chief analyst, offered a Twitter-sized definition of cloud computing: "Shared services, under virtual management, accessible over the Internet by people and other services via Internet standards." Some, but not all, are offered on a self-service basis, he said.

IDC revisited its growth projections for all areas of IT after the recession set in, and cloud computing was almost the only one for which its projection increased, Gens said. It expects spending on cloud services to almost triple by 2012, to reach $42 billion, or 9 percent of IT revenue.

The benefits of cloud computing cited most often here were the speed and lower cost of deploying new applications; the ability to pay only for capacity used; the ability to scale services up and down quickly; the need for less in-house IT staff; and access to the latest technologies.

Cloud computing has moved past early adopters and is entering the "early majority" stage, Gens said. It is still an emerging area, however, and customers have several areas of concern, he said.

Besides those listed above, panelists here said interoperability is a worry, in particular the inability to move application instances easily between different cloud providers. Another concern is choosing a provider that goes out of business by the end of the year, given the recession.

"We've taken an aggressive approach to monitoring our providers and vendors because everybody is at risk right now," Schumacher's Menefee said. "With smaller vendors who we work with, we're putting code in escrow accounts, and at a minimum copying all our data to on-premise. It may not be functional inside an application, but at least we have access to that data if we need it."

"The No. 1 concern I'll have in 2009," he said, "is whether the software-as-a-service and cloud companies are going to make such drastic cuts in their research and development that their technology will stagnate -- that I'll be left with the same platform in 2010 as I had in 2009."

(IDC is a part of International Data Group, the parent company of IDG News Service.)