The cloud based university - the requirements

I am embarking on a journey towards the cloud based university, or at least towards a discussion about what can and can not be done in the cloud. I have been talking about the cloud and software as a service (SaaS) since 2006 but it is only in the past couple of months viable alternatives are showing up for more and more services. But are they really ready? Are we ready to start use them? Are they secure enough? There are in all honesty more questions than answers regarding the possibility to use cloud based services.

The prerequisites:

1. It has to fulfill a need from users! The service must meet a need from the users.
2. It has to be user friendly! If a service is supposed to gain widespread use it has to be user friendly.
3. It has to be secure! This is also a no brainer I guess, but difficult. How you be absolutely certain about what is secure when you do not have internal access to a service.
4. It has to have good privacy! How do you ensure good privacy? Legal aspects is one thing, but it is also about trust for the supplier of the service.
5. It has to be possible to integrate with services either in-house or in the cloud! In the long run integration is key.
6. It has to exist! No vaporware, if a service is to count, it has to be something out there now.
7. It has to be less expensive than an in-house alternative! It doesn't have to be free, but it has to be less expensive than using an in-house alternative.
8. It has to scale! It has to scale to a full sized organization. In this case around 6.000 employees and associates and some 30.000 students.
9. It has to be legal! It is naturally quite obvious, but it is not always easy to know what is legal given a certain context. In this case I am talking about a Swedish university which is part of the government.
10. It has to be possible and easy (?) to leave the service! It is likely quite easy to start using a service, but you have to be able to leave the service as well. A good exit strategy has to exist.