Security
· Cost
Knowledge
Integration
Decreased flexibility
Dependency (loss of control)
Cloud computing has its risks and disadvantages, however. Its dislocated nature, which is an advantage in many cases, can also be disadvantageous because the user loses control over the software application and becomes dependent on the provider to maintain, update and manage it. If something goes wrong, the user does not have direct access to the software and must depend on the provider to fix the problem. If the provider is unresponsive or unable to fix the problem quickly, the user can experience significant issues. For example, problems would occur if your company uses a cloud-based payroll software system and that system goes down the night before payroll is due. These problems would quickly become much worse if the provider is unwilling or unable to fix the problem and reliable backup services are not available. Similarly, if your company becomes dependent on a cloud-based software application and the provider is unable or unwilling to continue to provide that application, you will quickly encounter trouble. This trouble would quickly become more serious if the provider was not required to give notice of the cessation of the application in time to allow your business to locate an alternative. In today’s turbulent economic climate, cloud providers may encounter financial problems or bankruptcy, either which could seriously impair or eliminate the provider’s ability to continue to provide the cloud services to your company. Remember that these financial problems can happen quickly, and you will often have limited recourse in these situations.
Cloud computing can also bring substantial risks in the privacy and confidentiality areas. By using a cloud system, your company’s sensitive data and information will be stored on third-party servers, and you will probably have very limited knowledge or control regarding this information. If the provider has inadequate security or encryption systems or procedures, or if a breach of these systems or procedures occurs for any reason, your company’s private and confidential data may become compromised. This could have devastating effects, and could cause legal problems for your company if third party confidential information (for example, customer information) is compromised.
http://boardroombrief.com/2010/08/cloud-computing-advantages-and-disadvantages
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