Cloud computing allows companies to use services, software and applications on a pay-per-use model without actually owning any hardware infrastructure or licence. This helps companies save on setting up IT infrastructure or purchasing licences.
Data is hosted on servers, which are often located in foreign countries.
Sibal said certain rules need to be in place to ensure data safety, especially in cases where data is hosted in foreign countries.
What is the legal liability of those who house data for others and in event there is a violation of that privacy. What then is the legal procedure for compensation.
And if the server is not in India ... what kind of bilateral arrangements between countries should be put in place to ensure privacy and protection of your property Sibal questioned.
He added that security, being an important aspect of cloud computing, should be addressed especially since we are putting together the building blocks of this new technology (cloud computing) in India.
According to consulting firm Zinnov, Indias cloud computing market is expected to reach $4.5 billion by 2015.
There have been several instances of security being compromised, leading to apprehension for cloud users.
With sectors like banking and financial services, healthcare and PSUs adopting cloud, securing data assumes significance.
For example, in a 500-bed hospital, hundreds of medical images and medical records may be stored. Any data loss could hamper the diagnosis of patients.
The situation gets complicated in the case of banking and financial services, where data on millions of transactions has to be stored everyday.
Companies like Amazon.com, Microsoft and Google offer cloud computing services globally.
In the new world, we need new solutions and cloud computing is a business model to manage competitiveness of businesses in this environment, Sibal said at a PHD Chamber seminar on cloud computing.
IT Secretary J Satyanarayana said any company, which intends to adopt cloud computing, needs to assess its security needs.
The company then needs to create an accountability matrix which is satisfactory. With adoption of new technology, implementation and training become critical aspects to be addressed.