We are thinking to host our SQL server in a cloud. IS there any performance/security issue with hosting our database in cloud?

What type of cloud?

I am new with this so I don't even know what types of clouds are out there.

You can do this with Amazon EC2. You will get performance options and security will be on a very high level. Let me know if this helps.

you will probably notice higher load times since sql isn't on the same network. the load times will generally increase with the size of your queries.

won't hurt to test it though.

Good idea, Microsoft agrees with you. Check it out - "SQL Azure"

Well do you just mean you want High Availability for SQL server? You'd implement this with mirroring or clustering - the servers themselves can be on the cloud.

Hosting SQL in a cloud just gets you ACID rain. :D

There is a free option you can try here
http://www.microsoft.com/windowsazure/offers/

I don't think it would good to just move the SQL portion of your application and/or environment to the cloud. As resource itensive and network aware that SQL Server is these days especially with SQL 2008 R2. I think you'll starting getting weird errors that will be a nightmare to troubleshoot.

We tried this as a POC with a medium SharePoint farm for a customer and it was a disaster.

I would stay away from Amazon's EC2. I would keep your SQL database close to your main server. But it's all depending on the application your running. We have a few customers that do this, but there application that runs in windows that hits the database server. So there are no real issues. But if your having this for a website there will be latency issues (slowdowns).

Thanks,

A cloud environment - EC2 / Rackspace or any other - will allow you to dedicate instances to your database/SQL. This can mean better performance.

Amazon, incidentally, also has RDS or Amazon Relational Database Service, which can help you optimize your db performance. It is for MySQL 5.1, currently.

Cheers!

SQL server is the worst app to host in the cloud because it needs high iops, so you need to choose your provider carefully. Many of the enterprise providers recommend a hybrid solution that keeps your SQL server separate from your other virtual machines.

For a website, this is a bad idea. There will be latency issues and also billable transfer...

Just signup with a cloud provider. Many providers can also combine dedicated, shared and cloud servers, all of them connected via internal network. One provider that comes to my mind would be Cartika. There are more of course!