The recent phishing attack from China on Gmail targeted influential journalists, senior military personel and government officials in the White House. Along with the hack on Sony's Playstation network--a 44-day affair that cost the company an estimated $171 million--the recent rash of internet security breaches has many wondering whether America is prepared to take the big leap into cloud computing. Reuters reports that the confidence of computer industry leaders is shaken in such a way that may lead to slower adoption of cloud features due to a need for more expensive, more secure technology security.

The Security Issues

One of the major impediments to quicker adoption of cloud services is the lack of an open standard for companies building in that space. Dell, IBM, Cisco, Hewlett Packard and others are working together to simplify the infrastructure so that applications can work seamlessly across platforms, but the more open they make the standards, the more susceptible the cloud becomes to hackers. "We'd like to provide more capability to control the workload running on our processors, but the more we do that the more we invite malicious codes in," an AMD corporate vice president told Reuters. Apple, of course, enjoys the luxury of building everything with proprietary technology and doesn't need to participate in the collective effort.

It goes without saying that it would be bad news if hackers broke into iCloud, due to be announced on Monday. Apple reportedly paid between $100 and $150 million just to convince the big four record labels to participate in the service. Google and Amazon, who are offering competitive services with support from only three of the four major labels, are both implicated in the recent hacks. (Google, of course, runs Gmail, and hackers reportedly used Amazon's cloud computing platform to launch the Sony Playstation attack.) News that record companies successfully pressured the Tennessee state government into imposing legal penalties for password-sharing on services like Rhapsody shows a wariness of the new cloud model, so it makes sense that Apple and its well-policed store of DRM-heavy content won the confidence vote.

Where the Government Comes In

Assuming Apple can fend of the hackers and thieves, one other body may stand in the way of a quick and lucrative shift to cloud computing: the government. A recent flurry of activity on Capitol Hill to reevaluate the government's role in protecting citizens' digital rights and regulating e-commerce show that lawmakers are making the Internet a priority. Senator Al Franken grilled representatives from Apple and Google over mobile privacy practices, and Senator Jay Rockefeller took Facebook to task over letting younger users sign-up for its services. Businessweek reports that Senate Majority Whip Dick Durbin will soon introduce legislation that would require e-commerce sites like Amazon to charge sales tax, a regulation that Amazon has been fighting since its founding. Internet companies historically, like many companies, push back against any more government regulation in their business. Like Bill Gates and his competitors agreed upon during the Microsoft anti-trust hearings of 1998, less regulation means more innovation.

However, this year it's becoming glaringly clear that users stand to lose most in these security breaches. Sony might've lost money when their network crashed, but gamers lost real security when their personal information leaked out into the open. Ditto for the Gmail breach. Some hacking organizations like LulzSec, who broke into PBS this week, claim a higher moral imperative behind their attacks. If websites are poorly protected, somebody should let people know. LulzSec targeted Sony too, stealing a trove of user data while they "sit and laugh at the FBI" for failing to stop them.

The inverse relationship between digital security and digital innovation is something that neither the government nor the technology companies seem to be handling incredibly well. Google's Eric Schmidt wagged a finger at the government this week for tinkering with the basic fabric of the Internet, but only a few days later his company failed to keep hackers out of Google users' inboxes. No one seems to have good answers, so maybe it's only a matter of time before somebody pulls a Catch Me, If You Can on the country and runs for office on a hacker platform in order to some solutions from an alternatively informed approach. (It's already happened in Sweden.) Or maybe a summer intern will pull off something amazing.