John Johnson, vice president of licensing at ASCAP, says the organization had hoped to use Salesforce.com Inc.'s hosted service to manage and store digitized documents, but it offered very little storage. However, through a service from Appirio Inc. in San Mateo, Calif., he can now use Salesforce.com to manage documents stored in S3. This saves ASCAP thousands of dollars in labor costs, since the old method required manually digging through paper files to find contracts.

Developing cloud storage strategies can be complicated, and there's the nagging issue of security. But according to early adopters, the real silver lining of cloud storage is the savings. Analysts say that moving to cloud-based services can save IT money, because cloud computing involves the use of a shared infrastructure and allows certain costs to shift from capital expenses to operating expenses.

And competition is pushing costs lower, especially for large users. For example, Amazon cut its price for storage of more than 50TB to as low as 12 cents per gigabyte per month, down from 15 cents. And through June, it cut data transfer costs to 3 cents per gigabyte.

One early user, Peter Hedlund, a programmer at Encyclopedia Virginia in Charlottesville, Va., says he's interested in cloud storage because he likes the predictable prices he can get from Zetta Inc., a cloud storage service provider in Sunnyvale, Calif.

Through an affiliation with its parent organization, the Virginia Foundation for the Humanities, Encyclopedia Virginia has been storing primary data on systems in the University of Virginia's main data center, where, as Hedlund puts it, "we're a small fish in a big pond." Ramping up storage quickly was difficult, and he couldn't even get solid quotes on how much the university would charge for storage. Zetta's pricing structure of 25 cents per gigabyte per month "seems reasonable," says Hedlund, noting that now he can not only count on capacity on demand, but he can also accurately budget for it.