Sorry if this seems obvious, but I had a conversation with someone today who was saying how great "Cloud IT" is as "you get the same access worldwide - it no longer matters where users and data are".
He seemed a bit suprised when I said "not really, the data has to be somewhere and its a good idea to know where that is". Here are a few of my reasons:
1. Latency. Where is the data and where are your users? How far are they from the data, what distance, what's the latency, how many hops, how much do they travel and what's the performance like for them all? - Perhaps you need some WAN Optimisation for your cloud applications.
2. Reliability of network connections and infrastructure. As we've seen here in the first three months of 2011, countries can block or restrict Internet access, so just where will your data be housed by your cloud outsourcer? Both the US and UK lawmakers have talked recently about laws to restrict the Internet, perhaps it will come to nothing, but do you have a guarantee from your cloud provider that they won't suddenly move the data somewhere else (perhaps cheaper) without letting you know? Of course, countries with a small number of undersea links can also find that nature or ship anchors can cause outages and today's terrible earthquake in Japan reminds us of natural disasters that can also cause infrastructure problems.
3. Privacy and Data Leakage laws. You as the customer are ultimately responsible for your data. Does the outsourcer host the data in a country that has the appropriate regulations on data that you need? If outside your normal country of operations, do you have the appropriate safe-harbor clauses about tranferring data overseas? Again, can your outsourcer move your data without telling you?
4. Security. There's been a lot of discussions around security issues related to cloud computing, so I probably don't need to rehash those here - Here's some optional reading on that point