It's not a short yellow bus special cloud, at least I hope not. Amazon is introducing a cloud for the US government, designed to meet their regulatory and compliance requirements. The idea here is that there are different needs for some sensitive information that the US government deals with, or at least some departments. I think most of us recognize this might be the case, and the same cloud infrastructure that some company like SQLServerCentral needs wouldn't be appropriate for OSHA or some other department.
Amazon introduced this US only cloud that is physically and logically accessible in the US only and adheres to some alphabet soup of regulatory requirements. It should allow more government organizations to store or process data in a cloud environment. I think this is a good move on Amazon's part, and a potential benefit for some US agencies that might process lots of data at times, but not want the overhead of a large IT infrastructure to maintain permanently.
This is a good step in the evolution of cloud computing, and I hope that Microsoft and other vendors start to develop specialized clouds as well. There are PCI compliant hosting services, but I can imagine that there might be semi-private clouds for medical, research, or other specialized data sets, which conform to the specific security and regulatory need of that industry. At some point I can imagine that Amazon or Microsoft might have parts of their data centers partitioned into different industry verticals that provide services according to different criteria.
The cloud can provide a great place for periodic and bursty workloads for many applications and companies, but there are definitely security concerns that need to be addressed. The development of specific clouds for specialized needs seems to be a positive step in allowing more companies to take advantage of cloud computing in the future.
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