While companies like Microsoft were touting the growth and benefits of cloud computing at the recent Cloud Connect conference here in Silicon Valley, one speaker gave what he called his \u201cwet blanket\u201d presentation warning of a big hole in the cloud business model.The cloud computing industry lacks a method for calculating the risk of a cloud computing accident and a mechanism for sharing that risk, said Drew Bartkiewicz, CEO and founder of CyberFactors, a risk assessment service that rates cloud providers on risk and also helps companies determine the risk of moving their data to the cloud.A cloud provider may tout the advanced security and reliability it offers to try to prevent a cyber attack or a service outage, but that doesn\u2019t mean an accident won\u2019t happen anyway, any more than putting nine seat belts in a car will prevent it from crashing, Bartkiewicz said.I came away from his presentation thinking that the cloud industry needs to address this problem if it\u2019s going to obtain any real growth going forward. It\u2019s not simply a matter of gaining the trust of cloud customers by touting security; there has to be some serious financial security behind it as well.\u201cCloud computing needs insurance so bad, it just doesn\u2019t know it yet because cloud customers will demand ... shared risk and shared responsibilities,\u201d he said.Service level agreements aren\u2019t the same as insurance because if a network outage results in the cloud provider giving the customer a $10,000 credit on their service, that won\u2019t fully compensate the customer if the outage results in a $1 million loss of revenue, he said.\u201cIf you\u2019re a cloud computing provider and you don\u2019t understand the economics of risk and you\u2019re not working on a strategy to bring risk into your model, you\u2019re not going to win,\u201d Bartkiewicz said. \u201cEven if the cost to use your cloud goes to almost zero, but the customer perceives that the cost to fail in that cloud is very high, they\u2019re never going to move more data to your cloud.\u201dCloud providers don\u2019t have the tools to evaluate the risk of a cloud mishap, calculate how to price that risk and build it into their business model, he said, and they don\u2019t have the expertise to process claims. Every other business in the physical world has a means of sharing risk, but the cloud industry has no equivalent. For example, a car rental agency sells insurance to the renter or has them assume the risk personally or with their own car insurance.Bartkiewicz said he\u2019s already heard cloud providers report symptoms of slower growth in cloud adoption that he attributes to this lack of a mechanism to provide insurability. But the risk needn\u2019t be borne only by the providers. If a company going to the cloud is saving, say $100,000, versus the cost of running their own data center, they should consider using 20 percent of that savings to buy a $5 million insurance policy.A cloud provider can spend all it wants to on security but it can't outspend risk. A resolution to the problem of risk management will make sure that cloud computing has a sustainable future.