I think part of the extra level of concern with cloud storage is, if you are using a public cloud for storage, the assumption is that your data is now leaving your direct control. In other words it is that age old concern about security in the cloud, for the most part, much of that concern has been addressed. I don't know of a single business level cloud storage solution that does not encrypt data before it goes across the internet and almost all store that data in an encrypted format. That means you are still in control of your data. In almost every case the cloud storage provider can't see or do anything with that data (unless you give them the encryption keys).
It also means it is secure. While in theory it is possible that someone crack your encryption it is more likely that someone will be able to get to your encryption keys. If you protect those like you do any other password type of data then your data should be secure from almost every situation. Also most cloud storage providers use some sort of clustered storage system, which means that your data is spread across dozens if not hundreds of drives. So not only is the data encrypted but it is not all on one drive. Even if, for example, a failed drive is improperly disposed of, the data on that drive is just bits of the overall data set and again it is still encrypted.
I would argue that the chance of you having encrypted data that is stored in the cloud being compromised is less likely than having data within your data center compromised where most data is not encrypted. As we discuss in our recent article "What Can You Really Do With Cloud Storage in 2011?" most business grade cloud storage offerings leverage a hybrid model where an appliance is installed locally to act as a cache to the cloud. The means that most of your data can be stored securely in the cloud which limits the amount of un-encrypted data that people interacting with your data center can access.
This hybrid approach also addresses the next area that causes experts to warn of caution, the bandwidth required to interact with cloud storage. We'll address this in an upcoming entry.
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George Crump is lead analyst of Storage Switzerland, an IT analyst firm focused on the storage and virtualization segments. Find Storage Switzerland's disclosure statement here.