Cloud computing technology is being incorporated into businesses at a rapid place.

In fact, cloud computing is a service that many smartphone and computers owners use on a daily basis.

It seems that the cloud has likely cut business expenses and helps companies avoid IT obstacles. Furthermore, cloud computing adds flexibility to firms and makes updating applications almost an instant process. While cloud computing is expanding and reducing costs for firms, there are also likely some important drawbacks to consider. 

Essentially, cloud computing is like an electric grid or an economy of scale. So with greater amounts of users, this lowers costs of production for cloud providers. During the 1990s, telecommunication companies began establishing virtual private networks.

Also known as VPNs, virtual private networks allow for staff of firms to access data without it being released to the public. Prior to the mid to late 2000s, most firms are using VPNs to share data. All of the sudden in 2008, a technological solutions company named Gartner sees an opportunity. Instead of having firms run on VPN company-owned software, there is a more cost effective way of having organizations shift to a per-server based system.

This per server idea by Gartner along with IBM’s “Smarter Planet” initiative are likely key reasons that the cloud concept takes off. Now the cloud is apart of many students lives here on campus, as can be seen with use of Gmail, Fitbit and other social media networks. With lots of data stored for both consumers and firms that use the the cloud, one area to consider is the security of this personal information.  

According to Stanford Medicine Information Resources and Technology on cloud security, “The user cannot know precisely who and what may be accessing their data, and has no way to monitor any of these actions.” In America for example, large cloud storage companies like Trello can sell your data and disclose it to whomever.

Additionally, a cloud user can attempt to delete their data, but the cloud service provider might keep a secondary copy of that information. Hence the saying “once it’s on the internet, it’s there forever.” It seems that many students simply are not aware that even the United States government can access your cloud data without a warrant. This could mean that job positions that you are applying for in the future may be granted access to your personal data. It is likely important when using the cloud, to use it with caution.

Some question the cloud’s security of information while others advocate for it. Looking at this issue from a larger perspective, cloud use is an example of a network good. In cases like with Gmail, there are advantages offered when many consumers of the same good share a common network. When this happens, monopolies and competitive oligopolies develop.

Since these large networks are only held by a few firms and have much potential for high revenue, entrepreneurs will come in and try to set standards. With such a highly competitive market, it may seem that cloud providers offering low security to your data will get weeded out by the dominant player.

Having high competition amongst cloud computing networks may allow for innovations to maximize security of data and thus improve consumer satisfaction. As can be seen within the cloud computing debate, customers may end up stuck in the wrong network. Being stuck in the wrong network seems to be the root cause of the anti-cloud debate.

There is a coordination problem in switching from one cloud provider to another and so not everyone will be happy with the dominant network in the end. Network markets like Amazon, Google and Microsoft are highly competitive. The more contestable the market, the greater incentive for product improvement to take place. It could be that the security scares for information in cloud servers will decrease as network markets compete for consumers.

A couple of years ago NPR did a story on cloud security gone wrong. A man by the name of Kyle Goodwin was storing some important videos for his business on an external hard drive. That external hard drive accidently landed in a cup of coffee and was destroyed. Fortunately, Goodwin had saved his videos on a secondary source- the cloud.

For some reason, when trying to gain access to his videos on the cloud, the only thing he got was the opening screen. What was happening was the US Government had seized the whole site. Goodwin was using Megaupload, which has been convicted of encouraging its users to share copyrighted movies and songs. As soon as Megaupload went bankrupt, the Dutch company erased all of its files. From this Megashare case we learn that it is beneficial to use the cloud but to not completely rely on it.