The recent "Issues in Technology Information" report by Brookings Institute details a number of structural problems that are inherent in cloud computing solutions. According to the report, a number of security issues, such as outsourcing to a third-party vendor, are natural parts of the cloud, and could be solved as the technology matures.

One of the clearest issues with cloud computing is trusting a third-party company with business-critical information and applications. Economists call this issue a "principal agent" problem. Anytime a business depends on a principal agent to handle any of its services, it experiences a risk from the loss of control.

Monitoring the actions of a principal agent can be incredibly challenging, and if, at any point, the agent's profit goals differ from the company's, security and reliability can be compromised. While many experts believe cloud providers are generally loyal because their income is based on providing secure services, official legislation does not exist to ensure such a commitment.

In many current cloud computing contracts, the responsibility for maintaining the security and confidentiality of data falls on the company purchasing the cloud, not the provider. This system is directly counter-intuitive, as the cloud vendor actually has the information in its data centers. As a result, users' ability to properly enact protocols to manage their data is limited.

Because the cloud requires a user to voluntarily put its data on a third-party server, many judges and other law enforcement officials believe it is fair to offer that data less protection.

This ideology is behind the Electronic Communications Privacy Act, which dictates law officers only need a subpoena to access information on a cloud, but require a warrant to search personal computers.

Legislation-related difficulties also exist outside of the U.S. Issues of data sovereinty can become problematic with cloud computing solutions, as information is frequently spread out in multiple data centers. Many cloud providers construct their data centers in diverse locations, often spreading across international borders.

When companies store their data on the cloud, they are not always aware of the physical location of their information. As such, compliance laws can be easily broken and information can be at risk because of confusing and varied international laws.

According to Brookings' report, governments may have to step in and create new legislation to support cloud computing trends. The cloud is maturing fast and being adopted in a wide range of industries. If the government steps in and monitors contracts and updates legislation, the technology could become much more secure.