SC has a good write up on cloud computing security:
Cloud computing, as least as a concept, is being driven largely by economics. It is generally less costly to run applications, add capacity and increase storage in the cloud, rather than investing in new hardware and software, and bringing on additional staff and beefing up networking.
“Cloud computing will happen because it has too much of an economic incentive and developer support – applications can be quickly added and developers can have a single place to maintain source code,” says Vatsal Sonecha, VP, business development & product management at TriCipher.
Overall, incentives include application-deployment speed, lower costs and fast prototyping. These are strong drivers. So much so that Gartner predicts that by 2012, 80 percent of Fortune 1000 companies will pay for some cloud computing service, and 30 percent of them will pay for a cloud computing infrastructure.
That is not to say that entire data centers will be moving to the cloud, at least in the largest companies. But for certain solutions, the cost benefits are hard to ignore.