As it becomes the environment of choice, there are high expectations of what cloud computing can achieve. But with much of the critical responsibility for maintaining an IT infrastructure shifting to an outsourced vendor, it is particularly important that prospective customers undertake rigorous scrutiny of vendor credentials and promises.

There are management and system issues associated with the move to the cloud which are common to enterprises of all sizes. This article attempts to answer the most asked questions. Cloud Computing – is it too good to be true? No. Cloud is now an established solution with proven returns and it can only continue to expand. Cloud is simply an evolution of the network. We had local with Local Area Networks (LAN), external with Wide Area Networks (WAN), and now global with cloud.

Cloud is the infrastructure to support Software-as-a-Service (SaaS); a way of leveraging the internet to deliver applications in a cost-effective way, with no on-premise infrastructure, which can be charged on a usage basis. While we've been using cloud technologies for more than 10 years for internet banking, Hotmail and Google, it still requires a mind shift in corporate IT strategies.

The move to the cloud sees the removal of all that is physically tangible about a company's IT infrastructure. The servers, wires and boxes, and traditional software are all eliminated. There's nothing to install. Can you guarantee the security of my data? This is the leading question that tests every vendor's proposition – they must be able to detail how they protect information at every stage of the data life cycle. But security should also be put in context.

Cloud vendors can guarantee higher levels of security and availability, in a cost-effective manner, because it's their stock in trade and they have the benefit of scale. On-premise systems can't match the millions of dollars spent each year by cloud vendors on security measures, strict internal governance, and compliance with comprehensive international standards, such as the Payment Card Industry Data Security Standard (PCI DSS).

While cloud vendors are rightly quizzed about password control and theft of information from data centers, in reality, the vulnerability for most businesses comes from disgruntled employees, not a data center break-in. What if the system goes down? From time to time the internet will go down, but with service level agreements guaranteed at 99.5%, and money back on failure, it is in the vendors' interests to ensure the highest levels of availability.

How many businesses would assiduously back up, upgrade and maintain their systems without dedicated internal IT resources? Within the rigorous discipline of the cloud environment, vendors push out upgrades, and regular security patches reduce the vulnerability of companies with traditional file servers. Threats to business continuity such as equipment failure, floods and fires are minimised by the move to cloud.

A vendor's server part can replaced in minutes, while backup equipment takes over to support customer needs. A business running traditional hardware is likely to wait a couple of days for the repair, and then there are always the issues of data integrity and backup. How much can I save? Enterprises, particularly those with experience of massive ERP structures and an army of IT managers, have recognised they are spending too much of their budgets on ICT systems. Cloud is the ‘green' money-saving alternative to on-premise infrastructure. Much of the design of cloud offerings is based on an agile template approach.

Customisation happens from the template, and not from scratch, so implementation is rapid and time to value very short. There is no software to install, no servers to commission, and best of all, upgrades are managed by the vendor while protecting any customisation made by users. Between energy savings and the reduced need for software, hardware, maintenance, personnel and floor space, customers can make immediate savings with the move to cloud.

Companies can save tens of thousands of dollars per year just by reducing server room electricity consumption by 99%. Can I meet local regulations if my data resides offshore? Most cloud vendors serve customers from data centers in the US, Europe and, to a lesser extent, Asian hubs such as Singapore. Vendors customise international releases of their offerings to meet local regulations covering areas such as finance, privacy, money laundering, fraud and terrorism. Regulatory stipulations do, however, preclude some government agencies and corporations from offshoring certain data. What are the application limits for using the cloud?

Many enterprises have made substantial investments in mission-critical, on-premise applications. These include solutions for highly transactional business processes, such as billing systems, which need to process millions of transactions in real time. Until international bandwidth capacities improve, these will remain on-premise systems. Where high volumes of data can be batched, then hybrid traditional-cloud solutions are completely viable now. Organisations are able to use the on-demand cloud services for processes such as year-end transactions which drain on-premise resources. What if the vendor goes bankrupt?

Escrow agreements should be in place to guarantee that customers retain access rights to their data irrespective of any financial or legal dilemmas a vendor might experience. If the vendor is a publicly listed company, it will have greater financial backup than a private company. Where to now? A key benefit of cloud is that it is returning the balance of control to a centralised model. Too much power has devolved to the desktop with mission-critical data segregated, at great risk of loss, and limited capability for real-time collaboration.

Functionality now available in the powerful browser environment, such as ‘drag and drop', means that the potential for cloud is no longer being held back. Having centralised data on a highly functioned, net-based technology platform allows companies of all sizes to mimic the rich client-server application model. Users are given access to real-time data and the ability to make faster and better decisions. Web-based applications and services are enabling great workforce flexibility.

Devices such as iPhones are allowing users to become more and more mobile. And as a raft of cloud-compatible devices hit the market, such as Apple's iPad, corporations can operate with fewer geographic or equipment boundaries. And new-generation, high-speed internet capabilities will resolve the last of the capacity restrictions.