Many companies, both small and large, are wary of doing business with cloud providers because of concerns about outages, data loss, and privacy issues. These are all serious concerns, but addressing them is a straightforward process.
For example, many cloud providers undergo security audits (the most famous of these is SAS 70), and many are compliant with SEC, HIPAA, and other regulations. Since cloud applications providers such as Salesforce.com focus on just one thing — providing that one application in a Web-based environment — they can typically focus many more resources on solving associated security problems than their typical customers.
Few small and medium-sized firms, however, can afford to hire security PhDs or monitor network traffic around the clock. The big cloud service providers do just that, and they spend a great deal of time and effort on maintenance and ensuring that the application is always up. Most companies can’t come close to matching the uptimes of cloud vendors.