Many companies today are paying attention to cloud computing and new aspects of large-scale, distributed computing. This emerging paradigm of the information age offers exciting benefits to companies and users, but cloud computing, like any other innovation, faces challenges such as security and privacy risks. How do different stakeholders perceive these risks and the effectiveness of the mitigations? And, how are these reflected in their trust in the cloud? The answers to these questions can affect the outcome of policy debates, and the allocation of resources in controlling security issues of cloud environments. This work presents an introduction to the cloud and some of its advantages and disadvantages. It discusses the role of risk perception and trust in security and privacy challenges of the cloud. It also makes recommendations addressing these challenges.