"I'm nervous about someone else controlling my data," Devereux says.

Cloud storage offers some enticing advantages. It's pay as you go, with no capital outlay and no need to buy extra equipment in anticipation of future storage demands. You scale storage dynamically and pay only for what you use. But you must -- and the vendor behind the service.

Few midsize or large businesses are willing to trust the cloud today, although some are experimenting. "There's a huge amount of interest," says Gene Ruth, an analyst at Burton Group. But, he adds, none of his firm's Fortune 100 clients is using a cloud storage service for live data today.

It's probably wise to proceed with caution, says , chief technology officer at Glasshouse Technologies Inc., an independent IT consulting and services firm that focuses on enterprise data centers, storage and other elements of the IT infrastructure. "Cloud storage today is pretty much an early-stage concept," he says.

Aside from a few heavyweights, like and Verizon Communications Inc.'s Online Backup and Restore service, most offerings come from small start-ups. "It's best suited for low-priority or low-access, low-touch kinds of applications, primarily file-based as opposed to block-based," says Damoulakis, who is a Computerworld columnist. But he says he does have clients that use services from Amazon as temporary expansion space for testbeds or marketing programs.