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Business consulting firm Protiviti has urged companies to ensure they have a clear understanding of the risks surrounding cloud computing implementation, after two cloud providers crashed recently and the security of some outsourced providers was breached.

Protiviti emphasises the benefits of cloud computing, which can include the reduction of overheads as hardware and software does not have to be held in house, and thus businesses only paying for services as they are needed.

Ryan Rubin, UK head of security and privacy at Protiviti, comments: "Sensible and properly selected cloud computing usage can bring long-term, bottom line benefits to companies. However, as with all new initiatives, the balance between risk and reward will need careful evaluation.

"Many enterprises and their employees are already using the cloud for software as a service solutions such as Salesforce.com or simple email solutions such as social networking sites such as Twitter, Facebook, LinkedIn and web email hosting platforms such as Hotmail and Yahoo."

Protiviti cites reliability, security, the immaturity of cloud suppliers, legal and business issues, potential for growth in 'shadow IT', and the effect on IT departments as potential risks.