Information Week reports that Amazon (NSDQ: AMZN) has unveiled their Amazon Virtual Private Cloud service. It is essentially going to be an isolated portion of Amazon Elastic Compute Cloud that is only accessibly via virtual private network. This new service will operate similar to their non-private service. Clients will only be required to pay for services that have been used and there will be no long-term contracts. They will have to put up an upfront investment though it is expected to be minimal.

One thing that has been slowing down the process of the cloud evolution is the issue concerning security. Currently, data stored in the cloud exists on an open network with the data of other people. This makes some people uneasy, and reasonably so.  This will allow people to move their existing infrastructure to a cloud computing infrastructure, save some money, and not have to be as concerned with security. Their data will be on a dedicated portion of the cloud and will be bridged to the customer’s current infrastructure via VPN.

Research firm Evans Data conducted a survey of 500 software developers in regards to cloud computing and they expressed most concern with data recovery and security. About 41% express no interest in moving to clouds. Those who are currently developing on the cloud are developing on private clouds rather than public ones. The people who are developing on Amazon EC2 currently are only prototyping and experimenting, they are not running critical applications on the cloud.

This fact is something that is slowing the development of the cloud computing model. Obviously no one will want to develop on a platform that is insecure. Many people that I have talked to about this technology tend to be uneasy about it because they do not like the idea of their mission critical data being in the hands of a third party. Now many people have gone the way of managed hosting such as RackSpace but many others are still putting servers onsite. The idea of private clouds are not new however they haven’t been offered by large scale developers such as Amazon. The major offerings so far have been for public clouds but now thanks to Amazon, we’ll start seeing more in terms of private clouds and that may help move cloud computing forward.

An early customer, pharmaceutical giant Eli Lilly, has moved some of their infrastrucutre to the Amazon VPC. They used Amazon EC2 in the past and the transition to Amazon VPC went “without cumbersome configuration or management hassles,” said Dave Powers, associate information consultant at Eli Lilly, in a statement.

One can only hope that this is step in the right direction for the cloud computing movement…

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