Technology and information system innovations continue their relentless pace—putting cyber risk, data security, privacy, and related issues at the top of the 2012 concerns list for insurers, risk managers, chief information officers, and others who must grapple with the disruption and emerging risks created by each new entry to the technology marketplace. One of the most significant technology arrivals—not brand new, but exploding into an estimated $150 billion market by next year—is now ubiquitously referred to as “the cloud.”

The metaphor of “the cloud” sounds mysterious, but it simply means that users increasingly are storing data off-site, accessing remotely hosted software applications, and relying on information technology infrastructure that is no longer on their physical premises. Instead, data, applications, and systems are “somewhere out there” (frequently, many places out there) and are accessed via the Internet from end users' businesses, homes, and mobile devices.

Everyone is in the cloud now — or at least impacted by it.
“Your company eventually will be interacting with someone in the cloud, whether or not you choose to go there,” according to Hemanshu Nigam, founder of technology security advisory firm SSP Blue. “You used to be protected if you were in a 'small pond,' but now thanks to the Internet and the cloud, your small pond is connected to other ponds large, small, and in between, located all around the world.”