Data future is up in the clouds.

Byline: NEIL STEPHENSON

THE concept of cloud computing is fast becoming the darling of the IT world. As leading household names muscle-in to get a piece of the action, the term hit the news earlier this year when IBM's plans for an 'open' cloud computing strategy failed to secure sign-up from either Google or Microsoft. But what's it all about? Cloud computing involves the transfer of data and applications from a computer harddrive onto the internet. IT resources are delivered over the web from a 'cloud' of data centres and bought on a subscription basis to meet a business's needs.

Many see it as the rational outcome of Web 2.0, as more and more users upload personal data and photographs onto the internet.

Googlemail is a basic example of cloud computing.

The idea of information being hosted in a data centre hundreds or even thousands of miles away from a business makes many IT staff jittery, but with careful research, and investment in services from credible, reliable vendors, cloud computing can present advantages for businesses.

Its primary advantage is that it is dynamic infrastructure. Extra resources and capacity can be bought as and when needed, so that businesses can respond to demand, rather than trying to predict when additional hardware may be necessary. Subscriptions can be changed quickly if a business suddenly expands or if it looks to cut costs.

Cloud computing can therefore be cheaper and more flexible than investing in new infrastructure. There is no capital investment or delay in waiting for a new server to be installed.

Two key issues, however, are security and service reliability.

It's important to take a rational approach to the security issues related to cloud computing. While there are inherent vulnerabilities associated with transferring data onto servers shared with other users, most of us are content to send credit card details and personal details over the internet.

Similarly, outages can cause disruptions to businesses whether or not their applications are hosted online and so the risk should be kept in perspective.

These are still early days and it will be interesting to see what the future brings. But going on the evidence currently available, cloud computing could be a desirable option for businesses in the current climate if used with caution as part of a wider IT strategy.

Neil Stephenson is CEO of Middlesbrough-based technology firm Onyx Group