http://www.theregister.co.uk/2010/01/26/cloud_insecurity/ 

By Dan Olds
Gabriel Consulting
26th January 2010

In the wake of the Google vs. China dustup, we're starting to see some 
discussion of the greater implications for computing, both in general 
and the cloudy Google way.

The fact that some Gmail accounts were accessed by hackers looking for 
dissidents raises some questions about the security of Gmail 
specifically and the entire cloud model as well.

I've always felt that security is one of the biggest concerns with the 
entire cloud concept. While cloud providers are increasingly paying 
attention to allaying customer concerns about data security, they aren't 
(and really can't) provide guarantees.

There isn't a cloud supplier in the world who will agree to compensate a 
customer for the losses arising from security breaches or associated 
downtime. This is completely understandable; it's hugely difficult to 
objectively value the cost of a security breach.

But there are situations where the stakes are higher than mere money. 
Take the US Department of Defense, for example. I was shocked to find 
out that Gmail is an accepted email alternative for official use. To me, 
this opens up all sorts of bad scenarios. Of course Google does its best 
to protect customers, but some things simply shouldn't be stored outside 
firewalls. I put a significant percentage of DoD communications into 
this category.

[...]


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