Cloud computing is a growing trend whereby the organizations these days are switching to virtual work-space. It has come to be known as the third revolution after Personal Computers and Internet in the field of Information Technology. It offers enterprises an efficient, flexible, easy to set up and potentially cost effective model to ease their computing needs and to accomplish business objectives. However, there are certain issues involved in switching over to cloud computing, particularly since the legal environment has not been set up as per the requirements yet. There is the risk of breach of security and privacy, interoperability, instability, data portability and the challenges of change management involved. While the adiposity of these critiques cannot be discounted, it cannot at the same time be denied that cloud computing is here to stay. The world is undergoing a remarkable technological change and with the advancement of Internet along with the expansion of IT infrastructure at large level, cloud computing is bound to revolutionize the way in which information and communication technologies are stored and disseminated, and will create lasting implications on businesses around the world.