Winners and wannabes in cloud-based security

In the near term, where security is core and mission-critical -- the upper end of the enterprise, financial institutions, and the government -- IT will have to add its own security layer. That means cloud computing won't be any cheaper than running the application in-house, says Pescatore.

"But a few years from now, strong security will be pushed down a layer, and there will be enough security baked in for all but perhaps the DoD," he says.

But if larger enterprises can't yet rely on security in the cloud-provided security, smaller companies may actually get better security from the cloud, says Pescatore. One reason is that a cloud provider can invest more in security than any individual small business could, because the cost is applied across hundreds of customers. Another is that as soon as a cloud provider patches a security vulnerability, all its customers are protected immediately, unlike the case for downloadable patches that IT must apply itself.

Gaining control over data location

Another issue that can affect customers large and small -- the location of their data -- will see a shift in the next few years, Pescatore says. That's especially important for companies that do business across national boundaries, as different privacy and data management laws apply in different countries. For example, the European Union places strict limits on what data can be stored on its citizens and for how long. Many banking regulators also require customers' financial data to stay in their home country. Many compliance regulations require that data not be intermixed with other data, such as on shared servers or databases.

Today, you never know where your data is stored in the cloud. And that fact raises all sorts of compliance issues around data privacy, segregation, and security. But this indeterminate location is beginning to change. For example, Google lets customers specify where their Google Apps data is stored, thanks to its acquisition of Postini, an e-mail security company. The Swiss Bank for example, wanted its customer data files stored in Switzerland, which Google can now do.

Further out is the ability to physically separate your data from other customers' data in the cloud's multitenant architecture, says Pescatore. But he foresees such separation being enabled from the still nascent but increasingly powerful virtualization technology.

Trust your "control freak" impulse

The security experts agree that no matter how stringent a vendor's SLA (service-level agreement) or how strong its security technology, reducing risk in any environment rests with the individual company's willingness to audit what is and what is not working.

Consultant Greenbaum says we all have a bit of the "control freak" in us, trusting no one but ourselves. Perhaps that is a good thing, he says. When it comes to cloud computing, the experts fundamentally offer the same advice, which can be summarized by two very famous quotations, one an old Russian proverb that President Reagan liked to use -- "trust but verify" -- and the other by Intel's famous former CEO, Andy Grove -- "only the paranoid survive."