With the recent announcement of Salesforce.com's multi-million dollar investment in Practice Fusion, which offers a free, ad-supported physician EHR, "cloud computing" has again taken center stage. More and more health care providers are choosing cloud-based EHR models, opting to let hardware installation, data storage, and application hosting be someone else's headache.

The term "cloud computing" describes the practice of storing all data, software, and hardware off-site, with the system accessible to hospitals and providers via a web browser-based login. No need to install expensive infrastructure, and secure data storage is part of the package. The EHR system is immediately available to any Internet-connected computer in the world. With cloud computing, everything you do is now web-based instead of desktop-based.

The health care industry has long been uncertain as to whether confidential patient records should be stored centrally or in the "cloud". Opponents challenge cloud computing as a new and unproven technology, warning that rapid adoption could result in disaster.

What happens when the servers go down, or you lose your Internet connection? Who  "owns" the patient records, and where are they physically located? Who is responsible for breaches in the cloud computing environment?

Cloud developers also face challenges. They cannot rely on homogenous computing environments. Their web-based software must account for different operating systems and hardware. The strength in cloud computing is it's scalability, which means it must function under enormous bandwidth loads and millions of simultaneous users.

As hospitals make more use of cloud resources, expenses can rise exponentially. One desired capability is to link ultra-secure private clouds with cheaper public offerings. For example, an EHR system that could pipe into a data transfer alternative during peak usage hours.

The success of Amazon's Simple Storage Service (S3) suggests that cloud computing is here to stay. At only 15 cents per gigabyte of data storage, and 10 cents per gigabyte transferred, it is becoming economically feasible for anyone to get into the cloud game.

Cloud computing could be seen as a HIT blessing: hospitals could share infrastructure and reduce costs with vast numbers of systems linked together. Vendors could introduce new pay-as-you-go models based on use of CPU hours, or gigabits consumed and transferred.

The technology looks promising, but with federal breach penalties approaching $1.5 million and prison time, no one wants to be the cloud computing guinea pig.