The great thing about cloud computing is that it is a pay-as-you-go model that allows you to increase or decrease your computing capacity  based on your current needs.  The location of the servers, the processing, the storage, and the bandwidth are all hidden from the consumer.  For a small to mid-size company that can’t afford to build out the required infrastructure themselves, it is a great way to quickly set up the infrastructure you need.  Even for large organizations, cloud computing has its place in helping to meet the rise and fall of demand over a period of time. 

But for those organizations that are required to secure their data in order to comply with HIPAA or state regulations like the Massachussetts and Nevada encryption laws, cloud computing causes complications, because if you are relying on the cloud provider for your infrastructure, you don’t have physical control over your data.  You actually may not even know where your data is physically located.  But that doesn’t mean that you can’t secure your data.  If you’ve got software based security software like the ZServer Suite, then you can encrypt your data regardless of where it is located by requiring the software to go where your data goes.  And since the encryption keys are under your control, even the cloud provider won’t have access to your information, even though they have physical control of the data.