The government has decided to back cloud computing, saying that the technology offers "real economic benefits" for business and the public.
Communications Minister Ed Vaizey told the third annual UK-China Internet Forum at the Department for Business, Innovation and Skills yesterday that cloud computing could drastically reduce costs for new companies and expand mobile capabilities.
"Access to the networked resources provided by 'clouds' enables companies to enter markets without having to meet the capital costs of building their own computer infrastructure.
"This is especially significant today, at a time when we are seeing an explosion in the number of portable devices with limited storage capacity.
"Access to clouds enables them to transcend that limitation and provide a level of functionality which would normally be associated with much larger machines," Vaizey said.
However, Vaizey believes that industry, consumers and governments need to co-operate to ensure that issues such as individual privacy and data security are properly addressed, in order to make the most of the technology.
"Cloud computing is a good illustration of the need for international co-operation to ensure the very important developments on the internet that hold great potential for both our countries are taken forward."
Meanwhile, the Cloud Industry Forum (CIF) also launched a code of practice for the delivery of cloud services yesterday.
The aim of the code is to eventually standardise and certify companies offering cloud computing services. The code, which has been in development since October 2009, was reviewed by more than 200 organisations, including service providers, software vendors and IT consultancies.
Andy Burton, chairman of CIF and CEO of webhosting company Fasthosts, said: "We firmly believe that the market needs a credible and certifiable code of practice that provides transparency of cloud services such that consumers can have clarity and confidence in their choice of provider. The market now has that benchmark."
EuroCloud UK, the industry body for SaaS and cloud vendors, welcomed the new initiative.
Phil Wainewright, EuroCloud UK president, said: "Organisations seeking to use these services need a straightforward form of certification or code of practice for potential suppliers that will unambiguously define the services offered, standards of operation and security.
"The CIF Code helps further EuroCloud's strategy to develop an industry-wide framework for customer confidence in the quality and integrity of cloud-delivered services."
The code of practice, which can be found here, covers a wide range of issues, including operational issues, delivery, financial viability of suppliers, governance and technology standards and interoperability.