Cloud computing is becoming an increasingly hot topic, but companies have been warned to be wary when considering cloud storage services.

The note of caution comes from Tony Reid, UK services director at Hitachi Data Systems, and Ian Osborne, project director of the Grid Computing Now initiative, who both feel that the risks do not yet necessarily outweigh the benefits.

"Cloud computing is still going through the hype cycle, and not a week goes by without yet another company, such as Google, IBM or Symantec, announcing a new cloud offering," said Reid.

"However, the focus to date has been on the consumer market and increased consumer use of online storage services such as Gmail and Amazon Elastic Compute Cloud.

"Businesses looking at putting valuable company data into the cloud need to make sure that they have a full understanding of the potential risks and benefits it can offer."

Reid and Osborne both believe that certain cloud-based services will become compelling platforms for a range of IT systems, including niche storage-based services such as de-duplication that enable intelligent data management and ensure that only one set of idle data is stored in the cloud.

But such solutions are not suitable for all scenarios. Reid said that around 40 per cent of corporate data is more than four years old and has not been accessed for that time, so a cloud-based backup system that includes effective version control and de-duplication could be a cost effective way to retain that data securely and off-site.

However, Osborne pointed out that there is still something of a regulatory minefield around this topic. Although the data may be owned by a company based in one country, it may be subject to different regulatory and compliance obligations if it is ultimately stored elsewhere.

There is also the issue of service level agreements around security and accessibility. Currently, most providers offer little or nothing in the way of guarantees covering how the data is stored, how quickly it can be accessed or by how many people at once. This could make running an enterprise-scale live storage system a potential hazard.

Osborne and Reid concluded that, in order for the technology to evolve from an early adopter stage to a mainstream IT platform, cloud providers will need to offer a completely robust system, in terms of accessibility, compliance and reliability.

In the interim, cloud-based storage services are expected to grow from the consumer level, to smaller businesses hoping to find an affordable way to access enterprise-class storage technologies.

Similarly, the niche services will continue to mature and expand until they reach the stage when they can offer a complete set of options that meet the needs of large organisations.