Computation is distributed in a many machines over the network. The data can be too big to store in one computer. The high end machine is also very expensive. Build a clusters of low end machines to satisfy the service economically. The data is stored and computed in a cluster of machines.
A lot company put the data in the data center and share the disk and other resource with a lot of companies. Privacy and security will be an issue. How they will solve those problems? The big company such Miscrosoft and Yahoo will try improve the security.
To know more about risks of cloud computing, please check the following link.
http://news.cnet.com/8301-1001_3-10402398-92.html
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