Cloud computing is using applications that are located on remote computers called servers. Some common examples of cloud computing would be Google Apps, DropBox and Microsoft's Workspace. Cloud computing is very convenient as is allow the user to access program and data as long as they have an Internet connection. One issue with cloud computing is privacy. As your data is stored on remote computers, you have no control over who accesses the data. Hopefully, cloud computing suppliers have strict privacy laws and very strong security. Even so, they can still read your data. For example, if you are a Gmail user, you should notice that the nature of the ads appearing on the right hand side of your Gmail screen is based upon your email content.
My recommendation is not to put anything of a sensitive nature on the cloud. Data security breaches happen regularly (for example, see Alberta health records hacked and Email security breach exposes customers credit care details) - more than is reported in the press. Companies do not like to admit that they have been breached because it reduces their clients' confidence as well as advertising the fact that their information center has been compromised. I have a feeling that one day we will hear about the security breach at at cloud computing supplier.
Before using cloud computing, understand the terms and conditions and only use it for data that would not harm you or your company. Think about it this way - only use cloud computing for data that you would not mind seeing on the front page of a national newspaper.