As CEO you have undoubtedly heard about cloud computing. Under cloud your company’s data and applications can be contained and run on the computers and networks of a third party like Google or Amazon, theoretically lowering your cost and reducing your data centers (along with staff).

If I sat you down for coffee, here are five things I’d tell you about cloud:

1) Pure cloud constitutes an interim step — App Internet will offer better solutions. Local devices like your iPhone or Android tablet or server are becoming ever more powerful — under App Internet those devices will join up with the cloud to solve problems. Compare an iPad (with apps) to a Google Chromebook and you’ll get the idea.

2) Storing your most sensitive data in the cloud is a bad idea. Because cloud vendors typically do not reveal their security protocols, there is no way to verify how safe your data will be. And if it is lost, you are liable, not the cloud vendor.

3) The cloud can be cheaper. Some vendors are claiming 50% cost reductions — that’s hogwash. But in some cases it could reduce operational costs by 10%-30%.

4) You can’t just flip a switch and go to the cloud. Before you go, Forrester recommends a full audit and rationalization of: 1) your data portfolio, 2) your applications portfolio, and 3) your security architecture. In other words, your roadmap must be plotted before you go cloud — or you’ll be repaving cow paths.

5) The primary reason for going cloud is agility, not cost savings. Cloud can unlock data — speeding up your business and making it easier for your people in the field to get the right information at the right time.

What other observations do you have on cloud? What has been your experience? I’d love to get your thoughts.